Amway, which sells nutrition and beauty products, has alleged that Flipkart 'contradicted' India’s guidelines that mandate e-commerce companies to seek permission in advance from direct-selling companies such as Amway before listing their products online, according to ET.
"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," an Amway spokesperson told the paper.
In the direct selling model, there are no sales through traditional retail outlets — companies hire distributors who, in turn, sell products to consumers. Most times, errant distributors themselves supply unsold stocks to e-commerce sites and the firms are working to identify and penalise them.
Amway has also accused sellers on Flipkart of tampering with the unique code imprinted on lids and silver foil seals to make it impossible to trace the source, the report said.
The direct-selling giant said it had sent notices to Flipkart asking it to bar such sellers from the platform, but the latter failed to do so. As a result, the company had to approach the Delhi High Court.
In 2014 too, Amway had issued notice to Flipkart, asking them to stop selling their products. Amway had said, "Our code of conduct explicitly states that unauthorised Internet selling violates agreements with Amway and our rules department regularly monitors this activity to prevent prohibited selling. We have taken legal action in the past when these rules are violated and will continue to do so to protect customers and individual entrepreneurs – Amway business owners (ABOs)."