Amazon Challenges HC Order Banning Sale Of Direct Selling Firms; Is It Amazon vs Amway, Oriflame, Modicare?

This year in mid-July, the Delhi High Court has given a verdict against popular e-commerce companies for the sale of D2C products on their platforms without their seller consent.

As per the latest reports are coming in, Amazon seller services has moved to Supreme Court for challenging the verdict.

High Court’s Order For Barring Sell

The story unfolds when Direct Selling brands like Amway, Oriflame and Modicare accused e-commerce giants of sourcing and selling their products in unauthorized manners. They said that these sites are selling their products at cheaper rates causing huge financial loss to these plaintiffs.

To further add to the story, they said that their products are being tempered and sold without their unique identification codes and while doing that they are also hiding seller information to make the situation worse.

These D2C (Direct-to-consumer) companies mostly deal with healthcare and beauty products. Their business mainly aimed towards quality products, loyal customer base and brand image. Apparently sell of these tempered products harms the brand image in the long run.

By considering plaintiffs situation, Delhi HC said that because of this irreparable injuries would be caused to plaintiffs, their businesses, and all those who depend on plaintiffs’ successful business, such as employees, distributors/direct sellers, agents, and finally, the consumers if interim relief is not granted.  

Amazon’s Retort to Direct Selling Company

Taking this tussle to another level Amazon has moved to Supreme Court challenging high court’s decision of barring sale of these products.

Amazon kept quiet on the subject. A senior industry official said that “While direct selling companies contribute a minuscule percentage to sales on ecommerce platforms as of now in India, Amazon is of the opinion that any court order restraining ecommerce platforms to sell specific categories of products might set a precedent for other categories as well.”

While giving an update about the situation an Amway India spokesperson said that “The matter is currently sub judice. However, we believe that the findings of the Delhi High Court are correct and in the interest of the consumers and direct sellers. We are confident that the Hon’ble Supreme Court will arrive at a similar finding.”

Last year, we heard news about Amway towing Flipkart to court alleging unauthorized sale of their products on their website.  Amway also filed a case against Snapdeal.

Although after Court’s involvement, Snapdeal compiled with the orders and had taken down Amway products from their website.

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