E-commerce platforms barred from selling products of companies engaged in Direct Selling: Delhi HC

E-commerce platforms are barred from selling products of companies engaged in Direct Selling- Delhi HC.

: one of the fastest growing industries, but how do you trust the seller when even the largest sites are fooling people? The Delhi High Court in a recent judgment declared platforms be barred from selling products of companies engaged in direct-selling. It was held that the products sold were in violation of the rights of customers under the Trademark act.

It was observed that even game-changing commerce websites such as amazon, flipkart, snapdeal, 1MG and healthkart sell products of companies like Oriflame, Amway, and Modicare on their platform which compromise on quality of goods offered for sale. It was also noted that these products are sold at a higher rate than they actually are which don’t even stand up to the quality promised to the buyer.

On inspection of warehouses of the e-commerce websites, the report submitted by local commissioners stated that incorrect attribution of names, tampered codes with inner seals, expired products with changed manufacturing dates were found.

Meg Whitman once stated “Communications is at the heart of e-commerce and community”, which is exactly what these leading websites lacked and fooled their customers without providing them the quality of goods as promised.

The defendants objected the claims by stating that they are violating Article 19(1)(g) of the Indian constitution but it was struck down by the court saying that it was a matter of consumers being affected and their rights being violated. Hence, the defendants couldn’t claim defense under this article.

Amazon, in its defense stated that according to Sec. 79 of the Information Technology Act, it was just an intermediary in the case and had nothing to do with the accusations made.

The Court relied upon Section 29 of the Trademarks Act to state that while it is perfectly permissible for a seller of a product to use a trademark to signify the source of the products which are genuine, it cannot indulge in conduct which would result in taking unfair advantage of the distinctive character of the mark.

It was thus concluded by the court that the use of the plaintiffs’ marks and the sale of the products without the consent of the plaintiffs was violative of the trademark rights, resulting in passing off, misrepresentation, and dilution.

The court directed that only those sellers who have obtained the consent of Amway, Oriflame and Modicare be allowed to sell their products on the e-commerce platforms. Also, the complete contact details of the sellers were ordered to be uploaded who have gotten the consent of the plaintiffs to sell their products.

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