Amazon, Flipkart, Snapdeal barred from selling Amway, other direct sellers’ goods; accused of tampering at warehouse

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Published: July 9, 2019 8:20:29 PM

The court noticed increased prices of products, incorrect attribution of names, tampered codes and inner seals, and expired products with new manufacturing dates, as per the report submitted by local commissioners based on the inspection of the warehouses.

ecommerce, ecommerce industryThe order came after the direct selling companies had filed pleas alleging their products being sold at cheaper rates.

India’s leading e-commerce platforms such as Amazon, Flipkart, Snapdeal have once again been caught in the regulatory quagmire as the Delhi High Court has restrained them from enabling the sale of products of direct selling companies — Oriflame, Amway, and Modicare on their platform, as per a PTI report. The order came after the three companies had filed pleas alleging their products being sold at cheaper rates on the e-commerce platforms leading to financial losses.

The court noticed that conditions of the products at the warehouses of the e-commerce companies including 1MG and Healthkart were changed. Also, increased prices of products, incorrect attribution of names, tampered codes and inner seals, expired products with new manufacturing dates were found, as per the report submitted by local commissioners based on the inspection of the warehouses.

The court has asked the e-commerce companies not to retail products of these companies without their permission. It also said that the sellers on these platforms can easily sell goods with no quality controls given the way such platforms works.

In its 225-page interim order, the court said it has no hesitation in holding that sale of goods of Amway, Modicare and Oriflame on the e-commerce marketplaces without their approval leads to “inducement of breach of contract, and tortious interference with contractual relationships of the plaintiffs with their distributors.”

The court observed that the way marks, logos, company names and product images of Amway, Modicare and Oriflame were dealt with was “clearly misleading to a consumer” because the sellers’ names were not completely mentioned.

Among the said e-commerce companies, in May this year, Flipkart was accused by the fitness wearable maker GOQii about the heavy discounts offered on Flipkart.com for GOQii’s fitness bands at heavy discounts on original cost even as the latter claimed of losing “a few 100,000 units at least” in corporate orders. Flipkart, however, had negated the charges.

The dispute, nonetheless, was settled last month with a joint statement issued by Flipkart and GOQii saying that Flipkart ‘engaged’ with GOQii in a transparent way and that Flipkart’s team worked on a ‘resolution’ benefitting the brand and the customers.

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