Why Italy Said Vemma's a Pyramid Scheme; Analysis by TINA

My Vemma Haul! (Photo credit: BenSpark)
But who's actually getting (keel)hauled? 

Truth in Advertising, i.e. TINA, has published a full analysis and translation of why Vemma was deemed a pyramid scheme in Italy back in March 2014.  From TINA article:

The investigation by Italy’s Competition and Markets Authority (AGCM), which sanctioned Vemma €100,000 (roughly $140,000), began in June 2013 after two consumers complained about the Arizona-based company’s marketing and sales practices. During the investigation, Vemma proposed changes to its Italian compensation structure. It also announced changes in its U.S. structure. But a TINA.org analysis has found that the changes to the U.S. compensation plan do not make the plan significantly different from the one Italian regulators found to be a pyramid scheme.

Here are some interesting facts about Vemma's membership in Italy, released by AGCM, where Vemma was given months to cooperate with the investigation, and even presented a defense.

• Only 27% of associates were eligible for bonuses by regularly ordering products from Vemma.
• Fewer than 100 individuals on average generated six-month sales commissions higher than €1,000 (about $1,300 in June 2013), while nearly all the other associates received quite low or even paltry compensation.
• A significant portion of the orders consisted of purchases made by associates themselves, presumably for their own consumption, which in the network are known as “autoship” sales.
• Approximately 20% of the total income generated from product sales was obtained from the sale of expensive Vemma packages called “Builder Packs” that cost €599 or €999 (about $700 to $1,300 in June 2013), and over 60% was generated from autoship sales.
• Only about 16% of the income was generated from the sale of products to third parties.
• Only 24% of associates had a VAT number (European version of "resale license"), which would enable them to sell products to third parties.