India’s food regulator Food Safety and Standards Authority of India (FSSAI) has issued a notification for e-commerce players violating regulator’s Direct Selling Guidelines, 2016 by selling health supplements and food items without the prior consent of ‘direct selling entities’

Direct Selling Guidelines, 2016, were issued by the Department of Consumer Affairs. According to the guidelines, any person who sells or offers for sale, including on e-commerce platforms/ marketplace, any product or service of a Direct Selling Entity must have prior written consent from the respective Direct Selling Entity in order to undertake or solicit such sale or offer.

Direct selling is a form of retail which follows a non-store distribution model where the products are sold or marketed by independent distributors or agents of companies called direct sellers. Some examples of such entities are LIC, Tupperware, Amway, Oriflame, etc.  As per the FSSAI’s guidelines such entities need to be registered with the government to operate as a DSE and that their product can be sold by marketplaces or agents with their consent only.

In a notice addressed to ‘CEOs of Flipkart/Amazon/Snapdeal/Shopclues‘, FSSAI has asked the companies to meet these guidelines. However, there is no deadline for the same. The matter was brought to notice of FSSAI by Indian Direct Selling Association (IDSA), it mentions it in the notice, which can be accessed on FSSAI’s website.

Marketplace’s Intermediary Liability

MediaNama previously pointed out that ecommerce companies like Amazon, Flipkart are marketplaces (Intermediary), and are ‘somewhat’ protected by Section 79 of the IT Act, 2008. The legislation proffers safe harbor to Intermediaries, as long as they act on complaints and do not knowingly allow the usage of their platform to break the law. So, legally these marketplaces, aggregators etc seem to be on safe ground. However, as we have repeatedly pointed out, there is a need for better understanding of the  responsibility, accountability and liability of platforms, marketplaces and aggregators, when it comes to aggregators or marketplaces or platforms (Uber, WhatsApp, Flipkart etc etc) which are intermediaries. Who is accountable, when things go wrong? And what about the liability of these platforms?