All appeals filed by the prosecutor against the Defendants are dismissed.

Summary of Grounds for Appeal

The evidence submitted by the prosecutor shall be compiled and marked as F, Inc. (F).

Examining the substance of the organization, the F may sufficiently recognize that it constitutes a multi-level marketing organization.

Nevertheless, the judgment of the court below which acquitted the facts charged is erroneous by misapprehending the legal principles and misapprehending the rules of evidence.

Judgment

The relevant legal principles indicate the Act on Door-to-Door Sales, etc. (wholly amended by Act No. 11324, Feb. 17, 2012; hereinafter referred to as the "former Door-to-Door Sales Act").

Article 13 of this Act provides that multi-level marketing entities shall register with competent authorities and shall be subject to criminal punishment pursuant to Article 51 in the case of violations of this Act, and thus, it is necessary to strictly interpret the relevant provisions.

In full view of the provisions of the former Door-to-Door Sales Act and the Enforcement Decree thereof, in order to constitute a multi-level marketing under the above Act, ① all or part of consumers as stipulated in Article 2 subparag. 10 of the former Door-to-Door Sales Act and Article 4 of the former Enforcement Decree of the Door-to-Door Sales Act, which purchased goods, etc. supplied by the relevant seller, shall be engaged in the same activity as a specific multi-level marketing salesperson, and ② the multi-level marketing salesperson shall be solicited to both retail profit and bonus. If the above requirements are not met, multi-level marketing as stipulated in the former Door-to-Door Sales Act can not be seen as multi-level marketing under the former

(see, e.g., Supreme Court Decisions 2006Do7470, Jan. 25, 2007; 2008Du17424, Apr. 9, 2009). The lower court determined as follows: (a) where a partner sells products to a consultant, the consultant is under Article 2 subparag. 10 of the former Door-to-Door Sales Act.