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Amway v Procter & Gamble,
The Conspiracy Theory

Amway/Quixtar Lawsuits

Amway v Scheibeler
Stewart v Gooch, Childers et al, Third Amended Complaint, January 2003
Hart v Gooch, Childers et al, First Amended Complaint, January, 2003
Netco v Dunn, Gooch, Childers et al, First Amended Complaint, January, 2003
Hart v Gooch, Childers et al, April 19, 2002
Stewart v Gooch, Childers et al, January 2002
Scheibeler v Harteis, November, 2001
$16 Million in Damages Sought in AMO "Tools" Squabble, August 3, 2000
Canadian Tax Authorities v Distributors, July 14, 2000
IRS v Distributors, June 2, 2000
Fish Deposition
Team Resources v Fish and Andrews
Morrison et al v. Wilson et al, June 22, 2000
Woods v Britt, August 1998
Musgrove v Amway, June 1998
Griffith v Amway, May 1998
Taylor v Duncan, March 1998
Hayden v DiSalvatore
Touchton v Amway, Gooch et al
Lavoie v Yager, January, 1998
Hart v Gooch et al, April 1997
Setzer v Amway, 1985

Earlier this year, Amway filed a lawsuit in its home-town court in Grand Rapids, MI, against its corporate nemesis Procter & Gamble. On the surface, the suit seemed strange. First, it was very small, asking for only $75,000 in damages. Compared to the millions at stake in the other legal fights against P&G, this was small potatoes indeed.

However, over the ensuing months, Amway's strategy became clearer. This suit served as a springboard for Amway to subpoena the contents of some of its internet critics' computer hard drives and other records. Ostensibly, Amway is attempting to tie critical site owners in with P&G. Their theory is that P&G secretly financed and fed documents to site owner Sidney Schwartz, author of Amway: The Untold Story. Since Schwartz' site existed prior to any contact he had with P&G, this is at best ludicrous. Amway's narration of this "conspiracy" is very clever.

The next step in the conspiracy, according to Amway, is that Schwartz, acting as a tool of P&G, enticed others to set up websites critical of Amway. They have accused Schwartz of, among other things, maintaining a site (which they refer to throughout the legal complaint as the "P&G/Schwartz site") that:

  • "foments hate rhetoric about Amway, its employees, and its distributors."
  • "lacks objectivity and is replete with false statements, half-truths, and distortions, all of which are calculated to paint Amway in a false and negative light" and
  • consists of "negative, false, and misleading information."

These phrases are repeated many times throughout the complaint. Does Amway really believe that saying something makes it true?

First, this is the good old US of A. We are supposedly protected by a Constitution which gives us certain rights and freedoms. One of them is the ability to freely speak and voice our opinions. Amway is perfectly free to voice its opinion of Schwartz, just as he is free to voice his opinion of them.

Second, we are talking about a web site here. This is not unsolicited mail which gets delivered to your mailbox whether or not you want it. This is not a TV show that you are forced by some mysterious Big Brother to watch. This is a web site. This is not a phone call that you can't hang up on. Before you can read the information on a website, you have to look for it. Web sites don't just download themselves into your computer. I mean, we're not talking spam e-mail about Quixtar here! Any distributor, or prospective distributor, has every right to search for information about the Amway business, and to determine for himself whether the information he finds is credible, believable, and should be acted upon. Schwartz doesn't go into living rooms and tell people what they can and can't, should and shouldn't do.

What exactly did this "false and misleading information" consist of, anyway?

    1. Copies of publicly available legal proceedings against Amway and its biggest distributors.
    2. Copies of a doctoral dissertation dealing with the Amway/Canadian customs fraud.
    3. News releases.
    4. Letters from web site visitors. Reams of letters. Letters that attacked Schwartz, letters that thanked him for providing useful information, letters that exposed tremendous abuse and hurt that the writers had suffered at the hands of their upline. Letters that he posted as they came to him, pro and con. Letters that, by their sheer volume over a long period of time, were too compelling to ignore.
    5. Information about cults, and from speakers, authors, sociologists, college professors and others who classed Amway as a cult; from former Amway Corp. bigwig William Nicholson who described his mission as "downplaying evangelism and cultism."
    6. Information from reputable sources (such as a former speechwriter for Jay Van Andel and CBS 60 Minutes, the Detroit Free Press) about the obscene amounts of money that the leaders earn on selling tools and functions to their downline -- something which had been very secret before Schwartz publicized it.
    7. Price comparisons and Consumer Reports ratings on Amway products.

Amway accuses Scwartz of providing links to other "anti-Amway" web sites, and of masterminding some conspiratorial web ring. Last time I looked at Schwartz' site, he also had links to Amway's web site. Hmmm. How many web sites have you visited lately that did not have links to related sites? In fact, Crown Jody Victor maintains a website as part of his Markerman Productions tool business. On that site, he has a "legal disclaimer" which states:

"This site contains links to third-party web sites. The linked sites are not under the control of the owners of this site or any of their affiliates, and are not responsible for the contents of any linked site or any link contained in a linked site. This site is providing these links only as a convenience, and the inclusion of a link does not imply endorsement of the linked site or it's products or services by this site or any of it's affiliates. The owner of this site or any of its affiliates shall not be liable for any damages or costs arising out of or in any way connected with your use of any of the services or companies accessed through this web site."

If it is obvious to him that he is not responsible for the contents of other people's sites, why is the same not true for Mr. Schwartz?

There is an organization on the internet called "Webring", which provides the html code for the "Anti-MLM/Anti-Amway Webring." According to information on the Webring site,

"Welcome to WebRing, one of the fastest and most exciting ways to navigate the World Wide Web! This completely free service offers easy access to hundreds of thousands of member websites organized by related interests into easy-to-travel Rings." (Emphasis mine.)

Some of the webrings bear titles like "The Ring of Fine Art" which features virtual art galleries, the "International Cybermalls Webring," the "Internet Marketing Webring" and "The Medical Student and MD Ring." In other words, a "webring" is a pretty ordinary navigational device on the internet.

However, one of the links that Schwartz provided on his site was a link to the site of Kenneth Lowndes. Lowndes has some serious grievances against Amway, which he expresses very aggressively. His method of expression may not be very appropriate, but to blame Schwartz for the content of Lowndes' (or anyone else's) site is absurd. Schwartz also had links to this site. He certainly has never had any control over what I choose to post or to write about!

Amway then recounts the stories of a small handful of distributors who blame Schwartz for a reduction in their business. For example, "Thereafter, the new distributor lost interest in the business, would not attend meetings, return phone calls, or actively pursue his business." Now, in my years as a distributor -- before the internet and Schwartz' web site -- I certainly had a significant number of people who bought kits and then lost interest in the business. In fact, it's so common it was known in my organization as "shoving the kit under the bed." By the same token, people would see the plan for the first time, appear to be interested, and then never follow up with any more activity. This is such normal behavior for prospects, in fact, that distributors are taught to stress with them again and again NOT to talk to non-distributors about the business. They are routinely warned about dreamstealers and negative people in an attempt to keep them from really checking out what they're looking at. Is Amway going to file suit against every friend, relative or neighbor who "talked someone out of" building an Amway distributor business?

According to Amway:

"The South Carolina Amway distributor and one of the distributors in his organization had contacted prospective distributors about starting a distributorship. The prospective distributors were a married couple with hundreds of friends and relatives in the Philippines, thus representing an excellent prospect to expand the distributorship internationally.

"36. The Philippine couple agreed to attend a business seminar in Columbia, South Carolina, to learn more about the Amway business and they were very excited about starting an Amway distributorship.

"37. Prior to the seminar, however, the wife printed off pages of negative, false and misleading information about Amway from the P&G/Schwartz web site. The false and misleading information, among other things, falsely alleged that distributors only made money by forcing people in their organization to buy motivational tapes and materials at inflated prices. As a result of the false information, the couple lost all interest in starting a distributorship and began distributing the pages of negative and false information to people in the South Carolina Amway distributor's group."

Amway attacks Lowndes, who "apparently has nothing but contempt for the duly issued and served discovery process of the United States." Well, that's his Constitutional right! Lowndes, however, is only one of many of Schwartz' "confederates."

And of course, P&G, the master conspirator in this scenario, had set out to "make Amway the scapegoat for persistent rumors linking P&G to Satanism." Now, as a distributor, I had heard this rumor from distributors in the mid-eighties, the late eighties, the early nineties. . . as recently as last week when a disillusioned distributor forwarded to me an an e-mail written by a Diamond Direct Distributor who quoted this rumor. Hmmm.

Anyway. . . on with the show!


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This page updated Jul-26-99

 

This page last updated Oct-1-99

 

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