Goqii V. Flipkart: Predatory Pricing or Breach of Contract?
Flipkart, one of the most trusted eCommerce website recently ended up settling a legal dispute with an Indian health and fitness brand, GOQii as it was allegedly running into loses because its products were discounted up to 70% to the retail price on the eCommerce website, which lowered the price of the products much more than the agreed price by both parties.
GOQii is a health and fitness brand that offers its customers with smartwatches that track their health and fitness data, heart rate and blood pressure, or even the sleep data in that case. They are equipped with nutritionists and doctors specially tailored for individual customers as per their needs. Their main aim is to help people with living a healthier lifestyle.
GOQii has a good market share of around 19% and was the second biggest player in India’s wearables market previous year.
Last year GOQii had entered into a contract with Flipkart in which the healthcare brand licensed the global retailer’s website to sell two of its devices. The price agreed by both the parties for the devices were at least for Rs. 1999 and Rs. 1499. But, later the scenario was that it found Flipkart was selling the products at an unauthorized discount rate by reducing the price to Rs. 699 and Rs. 499 respectively.
GOQii filed the Petition in Bombay Court about a month ago in which Flipkart took to the defense that it could not be held responsible for any discounts which are determined by third-party firms that apparently sold those two devices via its websites. Flipkart also reached out to the Department for Promotion of Industry and Internal Trade (DIIT) and the Competition Commission of India for their aid in the present matter. GOQii also complained of its customers facing trouble and replacing the damaged products they received from Flipkart at a discount.
The court put an interim injunction on Flipkart’s sale of the devices along with the third party seller to ban the sale of the same wearable via Flipkart. The dispute was settled but the grounds on which it was settled were never disclosed to the public by the companies. Consequently, we can again find GOQii health devices to be sold on Flipkart.
The legal quarrel was seen as a test case of the retailer’s operating scheme in the global market.
Both the companies ended their legal battle on 12th July 2019 on a friendly note. Flipkart stated that they constantly engaged with GOQii to sort all the differences between them.
Small traders and a right-wing group close to Prime Minister Narendra Modi’s ruling party showed grave concern about the e-commerce companies operating globally, stating that they burn billions of dollars with high discount rates on some products to attract customers onto their sites, in the expectation that they will also buy other goods.