HC prevents e-commerce companies from selling products from direct sellers without consent

New Delhi, July 9 () The Delhi Supreme Court has restricted electronic commerce companies such as Amazon, Flipkart and Snapdeal that sell beauty and health products from direct sellers: Amway, Modicare and Oriflame, without their consent.

The interim direction of Judge Pratibha M Singh came to the three direct sellers claiming that the products under their brands were sold on the e-commerce platforms at cheaper prices, which caused them financial losses.

They also raised fears that the products could be manipulated or falsified.

The court noted that according to the report submitted by the local commissioners who inspected the warehouses of the e-commerce platforms, which also include 1MG and healthkart, the conditions of the products had changed.

In addition, he said, the MRPs were on the upper side, there was an incorrect attribution of names, codes and internal seals that had been tampered with and the expired products had new manufacturing dates.

By citing an adage - with great power comes a great responsibility - which was popularized by the movie Spiderman, the court said that e-commerce platforms, which have penetrated all forms of business, have an obligation to maintain the sanctity of contracts and should not encourage or induce a breach.

He said that the way these platforms operate makes it extremely convenient and easy for sellers to sell products without any quality control.

The minimum behavior that is expected from the platforms is adherence to their own policies, which they have not done in this case.

Therefore, this court does not hesitate to maintain that the continued sale of the products of the plaintiffs (Amway, Modicare and Oriflame) in the e-commerce platforms, without their consent, leads to a breach of contract and unlawful interference with contracts contractual. the relations of the plaintiffs with their distributors, said the court in its provisional order of 225 pages.

He noted in his order that the way in which the brands, logos, company names and product images of Amway, Modicare and Oriflames were used was clearly misleading for a consumer, since the names of the sellers were not fully disclosed.

Contact details are not disclosed. It would be extremely difficult for the consumer to communicate with a vendor. Consumers can not be expected to take a detailed and detailed examination to find out the real source.

The consumer is not told that the seller is not authorized by the consumer, which literally requires investigative capabilities to track down the actual seller, the court added.

The judge said that the facts clearly show that in the prima facie stage, the apprehension of the plaintiffs that the products are being acquired through unauthorized channels and that the products are tampered with, the conditions changed and deteriorated, is completely valid.

The court said the company's right to conduct business was being affected and compromised by large-scale violations on e-commerce platforms.

He said that such activities also affect the rights of genuine consumers.

The plaintiffs, therefore, have established a prima facie case. The balance of convenience is in favor of the plaintiffs. Irreparable injuries would be caused to the plaintiffs, their businesses and all those who depend on the successful businesses of the plaintiffs, such as employees, direct distributors/sellers, agents and, finally, consumers, if provisional relief is not granted, said the court .

He directed that only those sellers who have obtained the consent of Amway, Oriflame and Modicare can sell their products on e-commerce platforms. The court also ordered e-commerce platforms to show full contact details of sellers who had obtained the consent of the plaintiffs to sell their products. HMP SKV SA