This week, when TikTok announced an updated version of its community guidelines, one small addition was more surprising than the others. Under a section of policy prohibiting various types of “Frauds and Scams”—which used to focus on outright Ponzi schemes, get-rich-quick hoaxes, and phishing attempts—the company became the first major social-media platform to declare that multilevel marketing was verboten as well. The addition “helps our community understand what to expect on TikTok and what to report to us,” a spokesperson told me. “Which further helps to protect people, especially those who may be vulnerable or unaware of MLMs.”
By word count in a set of company policies, the change is a small one. But in the broader context of online MLM recruitment, it could be huge. A generation ago, the phrase multilevel marketing was associated with suburban Tupperware parties and teens selling Cutco knives door-to-door. Today, MLMs thrive mostly online—in the spammy invitations to virtual Scentsy parties from people on Facebook you barely know, in the Instagram Stories of glamorous influencers who promise that some product changed their life (just DM to join their team!).
Most people who join multilevel-marketing companies must constantly be recruiting more people to their “downline” in order to make money. When they do so, they get a cut of whatever that person sells, and a cut of whatever is sold by whomever that person recruits, and down and down and so on. The people at the top can earn big; the people at the bottom typically earn little or nothing. On TikTok—where “flexing” accomplishments and possessions is part of the platform’s basic language—MLM salespeople could post short videos about the car they won, or flash their income statements, or show off boxes of new products, not just to their followers, but to anybody who might see their content in the main feed. From there, they could drive strangers over to their Instagram or Facebook and recruit them more personally. Recruitment is vital to MLMs, and social media is vital to recruitment. Now one channel of that recruitment has been cut off.