The Delhi High Court issued an interim order restraining Amazon Seller Services from selling products of Modicare after the Delhi-based direct selling company filed a case alleging that Amazon.in is illegally selling Modicare products on its platform, a source told ET.
Modicare is owned by New Delhi businessman Samir Modi who is also the founder of Colorbar cosmetics range and Twenty Four Seven chain of convenience stores.
In the lawsuit, Modicare is arguing that it is a direct selling company and its products are not allowed to be sold on e-commerce sites and can be only sold through direct selling modes, the source said. “You can sell from customer to customer but you can’t sell them online,” said the person familiar. “Even as per direct selling guidelines, online portals have to seek permission from direct selling companies to sell their products online, which Amazon didn’t have.”
Pooja Dodd, the lawyer representing Modicare, declined to comment saying the case is subjudice.
Amazon India spokesperson said: “We cannot comment on sub judice matters. However, Amazon. in is a third-party marketplace which enables sellers to list their products for sale to Indian customers. Sellers on Amazon.in own their respective products and are responsible for product compliances, as may be applicable.
As an intermediary under the Information Technology Act, Amazon. in does take appropriate action against sellers who are selling illegal products, as the case may be.”
On Monday, a host of Modicare products including Noni juice concentrate, whitening cream, soaps, fairness gel, calcium tablets, bathroom cleaners, detergents, among dozens of other products, were listed on Amazon.in. Modicare is the latest direct selling company after Amway and Vestige to challenge e-commerce sites.