TikTok Bars Content Promoting Multi-Level Marketing, Pyramid And Ponzi Schemes

By 12/17/2020
TikTok Bars Content Promoting Multi-Level Marketing, Pyramid And Ponzi Schemes

TikTok has updated its Community Guidelines to bar content depicting and promoting multi-level marketing — as well as Ponzi and pyramid schemes.

TikTok told BuzzFeed that it has “multiple measures in place to reduce the spread of misleading content, including content that aims to deceive people for financial gain.” And in terms of its approach to the removal of this content, TikTok said, “We remove content and accounts that violate these guidelines, which we identify through a combination of technology that automatically flags content to our moderation team for review, proactive investigation, and reports we receive from our community.”

Other additions to TikTok’s guidelines include a ban on ‘content that depicts or promotes phishing’, and ‘content that depicts or promotes investment schemes with promise of high returns, fixed betting, or any other types of scams’.

Some of the biggest multi-level marketing companies today include beauty and nutrition brands like Avon, Amway, and Herbalife — which net billions of dollars in annual revenue and often see participants turning to social media to publicize their wares.

Multi-level marketing companies derive revenues from a non-salaried workforce, whose participants work in a pyramid-shaped commission system, and who are incentivized to recruit others to join — instilling the hope of a big payout that statistically rarely arrives. Pyramid schemes, however, follow the same model without a real product being sold, while Ponzi schemes refer to investment scams in which money from later investors is used to trick earlier investors to believe that their bets are yielding big returns.