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Nowadays, a lot of people are involved in Multi Level Marketing (MLM).

In MLM Business have sponsor and recruiter. When sponsor recruit some people under him, The recruiter/new joiner will pay some amount as joining fee. The sponsor will get commission( it is also said as referral marketing). Some marketing plan also get up-line commission(3 to 10 level sponsor up-line etc). Commission structure depend on business plan. Multilevel Marketing or Network Marketing consist of lot of Marketing Plan like Binary, Matrix, Investment etc.

What is the Shari'ah view on Multi Level Marketing? Is this marketing phenomena acceptable in Islam?

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This could be a good question - can you flesh it out better perhaps? Give a very brief summary of this kind of marketing and point out potential problem areas if any. – Ansari♦ Jun 27 '12 at 13:42
Is there something about MLM that you think might conflict with Islam? – ashes999 Jun 27 '12 at 15:30
Good question! Like Ansari said, a brief description of what MLM is would go a long way in improving the question. – System Down Jun 27 '12 at 16:53
FWIW, I looked into this a few years ago. My conclusion was that this stuff is basically a pyramid scheme with a few tweaks to make it squeak past the legality test. – Ansari♦ Jun 28 '12 at 5:32

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I did a quick Google search for you. Here's an excerpt from the well-known fatwa site islamqa.com :

The Committee replied: This kind of dealing is haraam, because the purpose of this dealing is to earn commission, not to buy the product. The commission may reach tens of thousands, whilst the product is not worth more than a few hundred. Any smart person who is offered a choice between the two will choose the commission. Hence these companies rely on marketing and advertising of their product which emphasizes the size of the large commission which the participant can earn, and offers the incentive of a large profit in return for a small sum, which is the price of the product. The product marketed by such companies is merely a screen or a means of earning these commissions and profits.

The rest of the answer can be found here

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I'd appreciate anyone's help with the formatting, I'm not sure how to do the reference formatting that shows up in yellow that I've seen on other answers. – Ahmad Bushnaq Jun 27 '12 at 19:14
Did it for you. For future reference: what you do is highlight the text you want to show up as a quote, then click on the button with the double quotes sign (i.e. the " character) also titled blockquote. See this link: islam.stackexchange.com/editing-help – System Down Jun 27 '12 at 19:22
cool, thanks for your help. – Ahmad Bushnaq Jun 27 '12 at 19:33
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I'm not making a fatwa, but in all honesty I don't think many scholars understand this business completely. I personally don't see why it is haram (of course depending on what the MLM promises).

For example, there is currently one where you can earn a commission to refer people to a product that Really Works - not something fake/scam - it can really make them money online. So to give you an accurate picture of how this works: In essence, I'm coming to the product owner, affirming that his product is worthy/genuine, then bringing people whom are Interested in purchasing this to him. So in return for bringing these people, the product owner is paying me a sum fee for my Service. In reality I'm a service provider, I bridge the gap between the product owner and the masses who like his product. Now of course I'm not saying every MLM is halal, as there are many that rely on scams which aren't allowed.

Again, I'm not giving a fatwa but I'm putting my opinion out there because I believe many scholars don't fully understand this business model.

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I guess many of the scholar's do understand this. What makes you think other wise? Did you get any answer from someone in this reference? – mtk Feb 26 at 11:26

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