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CCI says consumer brands’ authorised-sellers-only demand is “prudent business policy”

The Competition Commission of India, while ruling on a complaint against Snapdeal for not allowing Ambitious Marketing to retail Sandisk products, ruled that it is "a prudent business policy" by SanDisk to insist that its storage devices being sold via online shopping portals be bought from its authorised distributers, and that the letter circulated by the company, informing customers that after sales and warranty services will be provided only to products bought from its authorised distributors is a "part of normal business practice". We chanced upon this ruling (dated May 19th, 2014) while researching for our recent Consumer Protection series, and it's worth noting how the Competition Commission views statements made by consumer retail brands asking customers to exercise caution while buying online, and hint that warranty might not apply. Details of the case: Issue This case involved a third-party seller (Ambitious Marketing), online marketplace Snapdeal.com, and memory storage solutions and software maker SanDisk. - New Delhi-based Ambitious Marketing had signed up as a seller on Snapdeal’s marketplace in November 2013. Snapdeal allegedly stopped sale of products offered by Ambitious Marketing on January 24, 2014 and removed its products from the site, saying that they had received a list of authorised online channel partners from SanDisk and products from only these sellers would be sold on Snapdeal. - In February this year, Snapdeal informed Ambitious Marketing that it had to obtain a No Objection Certificate (NOC) from SanDisk without which its products wouldn’t be listed on the site, even after Ambitious Marketing…

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