E-commerce platforms barred from selling products of direct selling companies

New Delhi, July 11 (KNN) The Delhi High Court has barred e-commerce websites like Amazon, Flipkart and Snapdeal from selling products of companies which are engaged in directs selling.

The court held that the products are being sourced through unauthorized channels and that they are tampered and impaired which violates the rights of the Petitioners under the Trademark Act.

Justice Pratibha M Singh gave the order after the plaintiffs- Amway, Modicare, Oriflame- alleged that products under their name were being sold on e-commerce websites at cheaper rates without their consent. These actions, they said, are resulting in financial losses to them.

Thus, this court has no hesitation in holding that the continued sale of the plaintiffs' (Amway, Modicare and Oriflame) products on the ecommerce platforms, without their consent, results in inducement of breach of contract, and tortious interference with contractual relationships of the plaintiffs with their distributors," the court said in its 225-page interim order.

The manner in which Amway, Modicare and Oriflame's marks, logos, company names and product images, were being used was "clearly misleading to a consumer" as seller names were not fully disclosed, court order noted.

“Contact details are not disclosed. The consumer, would find it extremely difficult to contact a seller. Consumers cannot be expected to do a fine and detailed examination to find out the actual source. The consumer is not being told that the seller is not authorized and they would. Literally, require investigative capabilities to trace the seller,” the court added while ruling the order.

 It was opined that none of the sellers were able to show any consent given by the Plaintiffs for sale of their products on their platforms. ‘Sellers have no rights if owners have not given consent.’

The manner in which the Plaintiff’s products are portrayed on the websites also constitute misinterpretation, said the court. KNN/K