Flipkart to sue advertisers for non payment

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Whether an e-commerce or brick and mortar business, recovering dues is a huge challenge. In a similar tussle, Flipkart, India’s leading e-commerce platform has dragged more than a dozen companies to court for not paying the dues.

The company is yet to recover dues worth crores from companies who have placed their advertisements on their portal and have not paid for it.

As early as last month, Flipkart was in news for filing a suit in the Delhi High Court against Western Digital, a US based computer data storage company. As per the sources of Flipkart, the company allegedly charged Western Digital for not paying the due amount for placing ads, which is more than a crore.

Amazon has a pre-paid system for advertising, where brand owners will have to pay in advance for the inventory that they purchase. Unlike Amazon, Flipkart does not have a pre-paid system as it allows the brand owners to first place the ad and pay later. This policy somehow is increasing their trouble and hence they are getting into such non-payment issues.

Internet and Mobile Association of India (IAMAI) is going to set up a committee to deal with such issues of non payment in the e-commerce sector. It is working on a payment mechanism system to cater the digital and media industry. The committee, on a regular basis, will follow up on payments with the vendors /advertisers so that such issues do not rise up in the future.

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