Update January 2010: The U.S. Supreme Court denied certiorari, refusing to review the case.
In Nitro Distributing Inc. et at. v. Alticor Inc. et al., the Eigth Circuit Court of Appeals affirmed a judgment that Amway’s unique network marketing business model did not unfairly restrict competition among the individual contractors that distribute its product. In its lawsuit filed in the Western District of Missouri, distributors of Amway business marketing materials claimed that Amway had monopolized the market for its tool companies, which sell marketing tools, self-help books, seminars, and motivational-speaker events to the network of individual business contractors (IBOs) who sell Amway’s products. The suit claimed that Amway violated antitrust laws by engaging in illegal tying arrangements, allocating customers, and conspiring to monopolize. The Eighth Circuit held that “the appellants failed to exclude the possibility of independent action, have attempted to characterize vertical constraints as a horizontal restraint conspiracy and have set forth factual allegations that do not demonstrate the existence of an unlawful restraint to trade.”