Amway has taken the Indian online marketplace Flipkart to court, accusing the now Walmart-owned company of selling its direct-selling products illegally on its e-commerce marketplace. Previously, it had raised similar issues with Snapdeal and 1mg.
It alleges that Flipkart is contradicting India’s guidelines that mandates e-commerce platforms to seek permission from the direct-selling companies before it lists such products online for selling, reports ETTech.
The US-based company says that it had sent notices to Flipkart asking it to bar such sellers from the platform but the marketplace had failed to do so.
A person, who’s aware of the matter, says that “Amway direct sellers are not allowed to sell through third-party shops or through online. But it is a volume game and some sellers sell it cheaper online and that they cannot do.
Another source adds that the sales representatives of Amway are bound by the company’s code of ethics that prevents them from selling its products through any other platforms than direct-selling.
An Amway spokesperson said:
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.
Further, Amway accuses that sellers on Flipkart are also tampering with and erasing the unique code imprinted on lids and silver foil seals, which makes its impossible to trace the source.
The company stated that it 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.”