New Jersey v. Koscot Interplanetary

Do the promotion of Koscot distributorships violate New Jersey state statutes on Consumer Fraud and Antitrust?


The New Jersey Superior Court found that the activities of Koscot did violate New Jersey Statute. The promotional meetings of Koscot misrepresented the amount of money that distributors were currently making. Specifically, Koscot officials stated that "many" distributors were making more than $50,000 a year when in fact no one had ever made that much, and that there were a "limited" number of distributorships available, when the number was unlimited. Both assertions had the effect of deceiving the public about the true market value of a Koscot distributorship. Further, Koscot forbid its distributors, who were independent contractors, from operating their business in certain ways as a condition of become Koscot distributors. This was found to be a naked restraint of trade in violation of New Jersey State antitrust law.

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Reference Info:State, 3rd Circuit, New Jersey | United States

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