Experts remind: It is difficult to escape the suspicion of pyramid schemes that constitute a "personnel chain"

Watching the news to earn cash, brushing videos to get red envelopes, and even walking, sleeping, someone will give you "welfare"... People can't help but sigh, in the Internet age, it has become so easy to make money?

In recent years, various "money-making" apps have emerged in an endless stream, attracting countless people to download. Zhang Tao, a partner at Beijing Deheng Law Firm and director of the Network and Data Research Center, said in an interview with the Rule of Law Daily that most of these apps use the marketing method of "pulling people's heads", and the platform should strictly clarify the boundaries between marketing and pyramid schemes to avoid crossing the line.

The "make money" app "pulls people's heads" into a fixed routine

Young Bao Mom Handi likes to brush short videos in her free time, and an advertisement that pops up on a short video platform once that "you can easily make a lot of money by watching videos" attracted her attention. Through the link, she downloaded the software.

"Swiping a video will give the corresponding notes, 10,000 notes can be exchanged for 1 yuan, and completing the daily check-in will also receive an additional cash reward." Because the software has no withdrawal restrictions, Handi successfully withdraws the 1 yuan obtained from the check-in after downloading, and then the system pushes a message to "remind" her to make more money by "pulling people's heads".

"The first invitation day will get 35 yuan" publicity let the heart of The heart of Handi sent the download link to a friend, after the friend used the link she sent to download the software, the software shows that the money has arrived, the system reminds that you can still continue to invite friends to download, and constantly expand the funds, but after successfully inviting 3 friends, Handi has since invited 5 new people to register, but the software has shown that the invitation failed, and no corresponding rewards were issued.

After using the software, Handi also found that if you do not rely on "pulling people's heads", the income of brushing videos alone is very low, and the platform mentions the existing fixed gears, except for the lowest one is 0.3 yuan, the rest of the gears are at least 15 yuan, and the amount is not enough to withdraw cash, and can only go to dig new users and earn "head fees".

Compared with Han Di, Li Bo, who is engaged in individual business in Beijing, not only did not make money from an app that also claimed to "make money by swiping videos", but also "took money". The App he uses to exchange tokens for cash by swiping videos, but token cash, the platform to deduct a lot of fees, the solution is two, one is to pull new people to join, the more people pulled, the more tokens are obtained, the withdrawal fee will be reduced accordingly; the other is to buy a certain number of tokens by recharging to unlock some high-level tasks and get more tokens. However, after recharging, Li Bo found that the task still had little income, and the income from insisting on one month was less than the recharge fee.

At present, in the mobile application market, there are not a few Apps with "making money" gimmicks, and the coverage area is very wide. After downloading several software, the reporter found that such software will basically insert other software advertisements of the same type in the use process, and attract users to download it with red envelope icons or words such as "click to make money".

Constituting a "personnel chain" and a "money chain" is suspected of pyramid schemes

Almost every "money-making" software is declaring that there is no routine, but after the reporter's actual measurement, he found that in addition to the difficulties in the withdrawal link, one of the core routines of this type of software is to "pull people's heads", and users must pull more people to "join the gang" if they want to obtain high returns.

In fact, the way of "pulling people's heads" is not unique to "making money" apps, and many software currently have so-called "pull new" preferential means to increase downloads and traffic.

"According to the definition of pyramid schemes in the Regulations on the Prohibition of Pyramid Schemes, which came into force in 2005, the act of 'pulling people's heads' is one of the manifestations of pyramid schemes." Zhang Tao reminded that at a time when app "pulling people's heads" behavior is becoming more and more frequent, we should be vigilant against its sliding into the illegal behavior of pyramid schemes.

Previously, there were also apps including "Kidbu" that were investigated by relevant departments for suspected pyramid schemes, how to distinguish between which are normal marketing methods and which are suspected of pyramid schemes?

Zhang Tao pointed out that according to the "Regulations on the Prohibition of Pyramid Schemes", pyramid schemes refer to the behavior of organizers or operators to develop personnel, who obtain illegal benefits by calculating and paying remuneration to the developed personnel on the basis of the number of personnel directly or indirectly developed by them or their sales performance, or requiring the developed personnel to obtain the qualification to join on the condition of paying certain fees, disrupting economic order and affecting social stability.

Based on this definition, Zhang Tao believes that if in the process of App marketing, the organizer or operator requires the members to develop subordinate members, and gives economic incentives according to the number of subordinate members they directly or indirectly develop, it may constitute pyramid schemes. For example, some apps encourage users to develop offline, while giving red envelope cashback rewards, users are divided into one-star talents, two-star talents, three-star talents and other levels, the level is proportional to the number of people who are offline, and each level has different high and low share rewards, which may be suspected of constituting pyramid schemes.

In addition, if the so-called entry fee is charged in the process of App marketing, such as requiring the developed personnel to pay a certain fee or pay a fee in disguise to subscribe to the goods, etc., to obtain the qualification to join, it may also be suspected of constituting a pyramid scheme.

Zhao Zhanzhan, a special researcher of the E-commerce Research Center of the Network Economic Society, further pointed out that whether the App's "pulling people's head" behavior constitutes a pyramid scheme depends on whether it constitutes a "personnel chain" and a "money chain". Specifically, the "personnel chain" is to develop the downline, so that the old users, new users between the formation of the upper and lower levels, the formation of the upper and lower line of the network; "money chain" is based on the number of participants directly and indirectly developed of the downline as the basis for the calculation and payment of remuneration, or each level can be from the next level to join the membership fee or other fees to extract a certain commission or commission.

In the view of Zhu Wei, deputy director of the Communication Law Research Center of China University of Political Science and Law, the marketing model of app "pulling people's heads" cannot be hastily identified as pyramid schemes "one size fits all", but should be comprehensively judged by combining factors such as user development models and rules, the basis for giving economic incentives, and the rules for calculating and paying remuneration.

Zhu Wei has studied some software that uses "pulling people's heads" as a marketing means, and found that most of these softwares do not divide the personnel level, but use red envelopes, cashbacks and other means to encourage users to constantly recommend new users to register and use, although they often set up certain routines in the withdrawal link, and even have the behavior of deceiving and misleading users, but in terms of such "pulling people's heads" behavior, it does not belong to the category of pyramid schemes.

Application platform review obligations need to be strengthened

In the name of false commodity transactions such as second-kill goods, sales of goods, and provision of services, an App develops regional managers and regional directors by returning income, rewarding shopping, subsidies, etc., to induce members to continuously "pull people's heads" to develop offline to obtain benefits, earn the difference, and continuously expand the capital trading chain; Profit by circulating between members through fake orders... In recent years, the relevant departments have announced a number of cases of using apps for online pyramid schemes.

In Zhao Zhanzhan's view, compared with the traditional offline pyramid schemes, the online upload and sales model cloaked in the cloak of "Internet +" emerges in an endless stream, is more concealed, involves more people, has a higher amount, and is more harmful. This requires relevant departments such as Internet information, market supervision, and public security to increase supervision and control of such behavior, form a regulatory synergy, and timely release early warning information to improve public awareness. At the same time, consideration should be given to issuing relevant norms to regulate the marketing methods of app "pulling people's heads" to prevent crossing the line.

Zhang Tao agreed with this, adding that the existing law stipulates the types of MLM acts, but does not make further detailed provisions on the criteria for specific judgments, and unclear illegal standards will also encourage the speculative behavior of operators.

"Previously, some apps that were suspected of being investigated and removed from the shelves for suspected online pyramid schemes because of the development of 'pulling people's heads' were re-listed through the 'makeover' method." Zhang Tao believes that this is related to the low requirements for the review obligation of application platforms in the current Provisions on the Administration of Information Services for Mobile Internet Applications (hereinafter referred to as the Administrative Provisions).

"Emphasis should be placed on strengthening the obligations of application platforms in laws and regulations." Zhang Tao pointed out that the draft revision of the Administrative Provisions issued in January 2022 greatly strengthened the review obligation of application platforms, requiring application distribution platforms to establish and improve management and technical measures to timely discover and prevent application violations and violations. Consideration may be given to emphasizing the use of applications for pyramid schemes as one of the illegal acts that the application platform should detect and prevent in a timely manner. At the same time, the application platform should be guided to carry out special supervision of applications that adopt a similar "pulling people's head" marketing model, warn and identify its risks on the platform, and once it is found that its marketing "out of control" has evolved into a pyramid scheme, it should promptly take disposal measures such as suspending services and removing shelves, keep records and report to the relevant departments.

Source: Legal Daily reporter Zhao Chenxi