BurnLounge and FTC Reach Compromise
Digital music store provider BurnLounge announced on Thursday that it has come to a cooperative agreement with the Federal Trade Commission (FTC), which several weeks ago branded the company's business model a pyramid scheme.
Since the FTC filed its complaint, BurnLounge announced that it would abandon the "network marketing" aspect of its business model, where customers were rewarded when they recruited others to sign up and pay BurnLounge fees to create their own digital music stores. The company's CEO Alex Arnold, one of the defendants named in the FTC complaint, also resigned.
"Network marketing was a unique channel to promote our products, but the strategic decision to voluntarily remove this part of our business was the right decision on all fronts," said BurnLounge CEO Grant D. Johnson.
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