09/18/2026
FTC sues and settles with Amway for a sum of $225,000,000. The allegations in the complaint largely mirror the lawsuit I was part of against Amway back in 2007.
In Woodward et. al v. Amway, we sued Amway alleging them to be a pyramid scheme in an effort to blow up their contract so people would be free to leave. We handed the FTC their case on a silver platter, all of the allegations backed up with proof. If the FTC had done its job 19 years ago, it's hard to imagine the amount of consumer harm that could have been prevented.
Reading through the complaint and the stipulated order (settlement), I have a few quick thoughts and questions, in no particular order:
Why now? The FTC had this case decades ago and punted. They chose to pursue smaller, weaker targets for years. Currently, the FTC seems to be a rudderless operation with just 2 commissioners instead of 5. Amway has always had tremendous political influence, so...why now during the Trump administration? The investigation was started at least by 2024 (maybe sooner), so this could be unfinished business from the prior administration.
Why settle? I'm very surprised (shocked?) that Amway chose to settle. I've never known Amway to settle anything. It's the sort of organization that makes you earn every yard. Amway has "get the President on the phone" sort of political influence. The allegations in the complaint, obviously one-sided, were the same sort of allegations faced by Neora and Neora was able to ultimately win. My only knee-jerk reaction is that second generation owners are not as battle-hardened as the parent founders. AdvoCare distributors would agree on this point.
Amway was represented by Kelley Drye. Kelley Drye also represented Herbalife. So that's 2 historical payments made to the FTC by KD clients...is that good for business?
The settlement amount is ash tray money for Amway. Amway likely generates north of $7B per year. It's a private business. $7b is not its market cap, $7b is its REVENUE!! CASH. And the profit margins have always been absolutely astronomical (the FTC would say because they cheat). $225m is nothing. They're paying because....I'm going out on a limb here.....
because they wanted to leverage the government action to end the tool business' stranglehold. Amway has been struggling with its dance with tool businesses for generations. I think this officially kills the practice (just a hunch). Amway will suffer domestically but they'll continue to rake in billions internationally.
I'm surprised at how little chatter there is. I'll go so far as to say...nobody cares. Unlike when Neora was sued, or Vemma, or even iMarketsLive...there has been zero texts, phone calls, etc. When I mentioned the lawsuit to my wife, her reply "Amway is still in business?" I have not heard a single thing about Amway, not a question from a distributor, not a question from a competitor, not a single thing in over 10 years. Their domestic irrelevance might explain their willingness to settle instead of litigate.
Hot Take: The settlement signals a lack of interest in the American market. By writing a small check and modifying a few business processes, Amway effectively neutralizes the parasitic tool businesses once and for all.
Amway Corp., one of the largest multilevel marketing companies in the U.S., and two of its affiliates—World Wide Group, L.L.C. (WWG) and Leadership Team Development Inc.
