Facts

The Federal Trade Commission filed a complaint against Herbalife International of America Inc., Herbalife International Inc., and Herbalife Ltd., in connection with Herbalife's allegedly unfair and deceptive marketing practices.

PLAINTIFF'S CONTENTIONS:
The FTC filed a complaint against Herbalife to obtain permanent injunctive relief in connection with Herbalife's allegedly deceptive marketing acts or practices. Herbalife allegedly ran a pyramid scheme by telling people they could become rich by selling Herbalife supplements. In reality, those people earn little money or none at all.

Result

The parties reached a settlement in which Herbalife agreed to certain injunctive relief, and agreed to pay $200 million for consumer redress. Additionally, Herbalife must face sanctions, including significant restructuring.

Other Information

According to the defense, the terms of the settlement do not change Herbalife's business model as a direct selling company and set new standards for the industry.