DENVER, Colorado — Empower Network, a multi-level marketing company, initiated compliance actions against two prominent affiliate operations, Project A.W.O.L. and Empowerville, on July 12, 2013, just prior to its scheduled affiliate conference in Denver. The company stated it was investigating both entities for alleged violations of its Terms of Service and Affiliate Policies and Procedures, emphasizing that Empower Network was not affiliated with, nor did it endorse or condone, the activities of either system. The move highlighted ongoing tensions between the company's corporate compliance efforts and the promotional strategies employed by some of its independent affiliates.

Empower Network operates a business model centered on selling digital marketing products, such as a Basic Membership priced at $25 per month and an Inner Circle product at $100 per month. The company’s affiliate program offers commissions, reportedly including "100% commissions" on certain product sales, to individuals who promote and sell these products. This structure places a significant onus on affiliates to adhere to specific marketing guidelines, particularly concerning income claims and the promotion of third-party tools, to maintain regulatory compliance and consumer trust within the direct selling industry. The company's compliance announcement on July 12 specifically stated, "Empower Network does not endorse, sanction or otherwise condone this type of activity. Nor does Empower Network make any guarantees for income or success."

Project A.W.O.L., an initiative reportedly started by Empower Network affiliates Kameron George and Glenn Arcaro, appeared to cease its online operations following the compliance announcement. Its website subsequently displayed an "under construction" message. Prior marketing language on the Project A.W.O.L. website, which may have contributed to Empower Network’s compliance concerns, included statements such as: "Over 99% of our affiliates also choose to also be a customer of one or more of our five products. The Basic Membership is $25/month and the Inner Circle is $100/month, but remember, you’ll get your investment back with only one sale following our simple step by step instructions as Empower pays you 100% commissions." This type of language, suggesting rapid returns on investment and high affiliate product purchase rates, often attracts scrutiny from regulatory bodies and internal compliance departments within the multi-level marketing sector.

Empowerville, the second entity named in Empower Network's compliance action, reacted publicly to the company’s announcement. The Empowerville website, which required visitors to grant access to their Facebook public profile, email address, and friends list before proceeding, published a "compliance update" detailing its objections. Empowerville contended that Empower Network had acted "without due-process, as no prior warning, nor contact was ever initiated." The statement further claimed that Empower Network’s compliance team "went against their own policy" by acting without prior communication, describing the action as "VERY unprofessional and unacceptable." Empowerville’s forums section, where it had stated a response and compliance video were posted, along with several other areas of its website, were subsequently taken offline.

Empowerville’s public response also challenged the perceived selective enforcement of Empower Network’s compliance policies. The entity asserted that it had "not broken any of their terms, and remain 100% compliant," unless new rules were enacted to suppress "community and team building." Empowerville’s statement pointed to the visibility of other potentially non-compliant websites in search engine results and referenced the practices of Empower Network’s own leadership. It cited an alleged Facebook post by David Wood, a prominent figure within Empower Network, in which he reportedly stated that he spent "over $1,000/month on courses and tools." Empowerville’s update interpreted this as evidence that Mr. Wood’s expenditures were "not $1000/month on EN products, folks!", suggesting that even company leaders recommended or utilized resources external to Empower Network. Empowerville concluded its public statement by indicating an intent to publish a "full list of non-compliant websites" in its members’ area, should Empower Network amend its rules in a manner that affected community building.

The dispute underscores the challenges faced by multi-level marketing companies in enforcing their compliance policies across a broad and often independently operating affiliate base. Such companies are routinely scrutinized for how their affiliates market products and business opportunities, particularly regarding income claims, product efficacy, and the promotion of external services or tools. The actions taken by Empower Network against Project A.W.O.L. and Empowerville illustrate an attempt by the company to control its brand messaging and mitigate potential regulatory risks, even if it risks alienating some of its active affiliates. The public nature of Empowerville's counter-claims also brings into focus the internal dynamics and disagreements that can occur within large affiliate networks regarding the interpretation and application of corporate policies.

The implications for Empower Network include the potential for reputational damage if the enforcement actions are perceived as inconsistent or unfair by its affiliate community. A lack of clear communication or perceived favoritism in compliance enforcement can lead to disengagement among affiliates and a broader sense of distrust. For affiliates like Project A.W.O.L. and Empowerville, the immediate consequence was the disruption of their operations, with Project A.W.O.L. suspending its website and Empowerville taking down parts of its platform. The broader affiliate community may also face increased uncertainty regarding the acceptable parameters for marketing and team building within Empower Network’s framework, potentially leading to more cautious promotional activities or, conversely, continued challenges to the company’s authority.

The public confrontation between Empower Network and its affiliates, occurring on the eve of a major company conference, highlighted the ongoing complexities of compliance management in the direct selling industry. This incident served as a public demonstration of the internal pressures and external regulatory environment that shape the operations of multi-level marketing enterprises and their independent sales forces.