Lyoness Europe AG forced by court to provide explanations. Does Lyconet classify as a “snowball system” in Austria too?”

A trial at the Commercial Court of Vienna on January 12, 2018 (Case no. 11 CG 75/16s-23) did not go too well for Lyoness Europe AG.  As a reaction to my reports (Mastercard lie, PUMA trademark infringement etc.) and the publications in the Austrian media, Lyoness AG Europe has filed a suit against me on account of defamation according to $ 1330 ABGB. But it seems that the proceedings are not going too well for Lyoness and the attorney Mr. Zotter couldn’t do anything to save the situation.

Right in the beginning, the judge played a YouTube video entitled “How does Lyconet work?” and asked Lyoness attorney Mr. Zotter if Lyconet is a marketing strategy of Lyoness Europe AG, which was confirmed by Mr. Zotter. Consequently, the judge shared his preliminary view that if Lyonet “works” in a similar way as Lyoness, the accusation of the company being a snowball system might be “historical”.

In this respect, Lyoness Europe AG was instructed to provide a detailed written report about the legal structure of Lyconet within eight weeks. Furthermore, it needs to be clear from this report if Lyconet also charges participation fees.

However, Lyconet could not exist without Lyoness and the other way round. Lyconet was founded among other reasons, because the damaged Lyoness members were dealt with according to the Consumer Protection Act, which was inconvenient for Lyoness. Under Lyconet, however, all members are considered marketers and self-employed entrepreneurs and are therefore “easier to handle”. But it seems that this is now also “off the table”.

LYONET has already been classified as a snowball system by a Swiss court ruling (Case no. EV 201642) of September 20, 2016 in the Canton of Zug (in force since October 20, 2016). Excerpt from the ruling, Section 4.1.1.:

After entering into an agreement with Lyconet, the member becomes an independent Lyconet marketer. The distribution and use of the loyalty program is promoted through the acquisition of new members and support of existing members, the acquisition of new marketers and support of existing marketer, as well as the acquisition of new SME partner companies and support of existing SME partner companies. In return, marketers receive compensation according to the Lyconet Compensation Plan (act 5/1, preamble, paragraphs 1.1 and 1.3). It is therefore a distribution system based on the snowball principle. Furthermore, Lyconet is working with what they call “customer clouds”, meaning that payments are made which could be multiplied in the future by purchases in the respective countries. So, on the whole it is the same principle as the old Lyoness country packages and it is therefore a snowball system.

If a few Lyconet marketers confirm in writing that they were asked to seek more marketers and SME partner companies, the requested statement by Lyoness Europe AG is something to really look forward to.

What started as a lawsuit against a journalist, could now have a boomerang effect for Lyoness Europe AG.

The proceedings have been adjourned indefinitely.