Amway has alleged that Flipkart 'contradicts' India’s guidelines that mandate e-commerce companies to seek prior permission from direct-selling companies before listing their products online
US giant Amway has dragged Flipkart to the Delhi High Court accusing the Bengaluru-based e-commerce firm of 'unauthorised' selling of its products on its platform, The Economics Times reported.
The company has alleged that the Walmart-backed e-commerce firm 'contradicts' India’s guidelines that mandate e-commerce companies to seek prior permission from direct-selling companies such as Amway before listing their products online, a source told the paper.
"This core concept of direct selling is reflected in the Direct Selling Guidelines issued by the Centre in 2016 which prohibits the sale of products of a direct selling company through e-commerce platforms, without the written consent of the direct selling company," an Amway spokesperson told the paper.
Amway's code of ethics bar representatives from selling the products through other platforms, another source told the paper.
"Amway direct sellers are not allowed to sell through third-party shops or online," another person familiar with the case told the paper, adding that some sellers sell it cheaper online but they are not supposed to do so.
The company has also accused sellers on Flipkart of tampering with the unique code imprinted on lids and silver foil seals to make it impossible to trace the source, the report said.
The Michigan-based direct-selling giant said it had sent notices to Flipkart asking it to bar such sellers from the platform, but the latter failed to do so. As a result, the company had to approach the Delhi High Court.
Amway stated that the company 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'.
In recent months, Amway has filed cases against e-commerce companies including Snapdeal and online pharma seller 1mg.com. It has already obtained orders 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, its 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.Similarly, Snapdeal has also taken down listings of products and provided information as required under the court's order, the report added.