The part against the Defendants is reversed.

Defendant

S with a fine of KRW 10 million, Defendant AC.

A. Article 22(1) of the Act on Door-to-Door Sales, Etc. (hereinafter “ Door-to-Door Sales Act”) aims to regulate multi-level marketing business entities. Since the Defendants are only multi-level marketing salespersons, the Defendants cannot be punished as a violation of the above provision.

B. The lower court’s sentence against the Defendants (Defendant S: a fine of KRW 15 million, Defendant AC: a fine of KRW 25 million) is too unreasonable.

2. Determination

A. Article 2 subparag. 6 of the Door-to-Door Sales Act defines “multi-level marketing operators” as “person who establishes, manages, or operates a multi-level marketing organization to engage in multi-level marketing business,” and defines “multi-level marketing operators” as “persons who have joined a multi-level marketing organization as persons who have joined a multi-level marketing organization.” Article 22(1) of the same Act restricts multi-level marketing operators to “multi-level marketing operators.”

Comprehensively taking account of the evidence duly adopted and examined by the Defendants as to whether the Defendants are multi-level marketing operators, the Defendants established the branch office of BH after meeting BH (hereinafter “BH”) with B, etc. at their own expense. The Defendants operated the branch office at their own expense and received the amount equivalent to 3% of the sales amount generated from the relevant branch office. Each branch office operated by the Defendants was established to build a nationwide sales network of BH through product experience and sales education, etc. In light of the above facts, the Defendants established the branch office of BH beyond selling goods or services by joining the multi-level marketing organization as a multi-level marketing salesperson, and established, operated, and managed by BH.