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    Amway takes Flipkart to court for ‘illegally’ selling its goods

    Synopsis

    Flipkart contradicts the rule that ecomm cos must seek permission from direct-selling cos to list products online

    Court1_BCCL
    Amway direct sellers are not allowed to sell through third-party shops or through online
    Amway has taken Flipkart to the Delhi High Court, accusing the Walmart-owned company of “unauthorised” selling of the US direct-selling giant’s products on the ecommerce platform.

    It has alleged that Flipkart “contradicts” India’s guidelines that mandate ecommerce companies must seek prior permission from direct-selling companies like Amway to list such products online, said a person with knowledge of the matter.

    “Amway direct sellers are not allowed to sell through third-party shops or through online,” said another person familiar with the case. “But it is a volume game and some sellers sell it cheaper online and that they cannot do.”

    Another source said Amway’s sales representatives are bound by the company’s code of ethics that bar representatives from selling the products through other platforms.

    Amway has also accused sellers on Flipkart of tampering with and erasing the unique code imprinted on lids and silver foil seals, making it impossible to trace the source, said the first person cited.

    flipkart

    The US company said it had sent notices to Flipkart asking it to bar such sellers from the platform but the marketplace had failed to do so.

    This prompted the Michigan-based direct-selling giant to approach the Delhi court.

    Flipkart didn’t respond to queries. Amway said it believes in conducting business ethically and is committed to help its direct sellers succeed.

    “This core concept of direct selling is reflected in the Direct Selling Guidelines issued by the government of India in 2016 which prohibits the sale of products of a direct selling company through ecommerce platforms, without the written consent of the direct selling company,” an Amway spokesperson said in an emailed response, adding the company takes consumer safety seriously.

    “Amway has sought judicial intervention in the interest of consumer safety, protection of livelihood of its direct sellers and for preserving the basic foundation of its business.”

    This is the latest in several cases Amway has filed in recent months against ecommerce companies including Snapdeal and online pharma seller 1mg.com. Amway has already obtained injunctions in these instances.

    “1mg is willing to assure that if and when the plaintiffs inform 1mg about any unauthorised sale of Amway products being sold on its platform, his clients would take immediate steps to take down all such Amway products,” a senior lawyer for 1mg told the court, according to a September 19 court order.

    “We are in fully compliance with that and respect the orders of the court,” Ishani Chandra, lawyer for 1mg, told ET. Snapdeal said it has been made a party in a dispute between Amway and its sellers.

    “The dispute pertains to alleged breach of Amway’s code of conduct and other agreements inter se between Amway and its distributors. Snapdeal is not privy to such arrangements,” a Snapdeal spokesperson said in an emailed response.

    “Snapdeal has complied with the interim order by the hon’ble court and has taken down listings of the products and provided information as required under the order. We are supportive of the legal rights of all parties.”


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