Tussle Between Paytm And Snapdeal’s Unicommerce Over Data Issues Continues

The on-going lawsuit between Paytm and Snapdeal owned Unicommerce over confidential business data has gotten murkier with allegations and counter allegations flying between the two. While the Delhi High Court has instructed Unicommerce to not use any data or information derived from the sellers of Paytm, Unicommerce maintained that the court has let the status quo be.

Paytm had dragged Unicommerce to court for accessing confidential business data on its (Paytm’s) commerce platform via the sellers on this platform. Unicommerce is used by many sellers on Paytm’s platform for order management & inventory across multiple marketplaces and carts. Apart from this, Paytm had also alleged that Unicommerce is using Paytm’s logo and name without any authorisation.

Through a blog post, Paytm had also warned sellers transacting on its platform that using Unicommerce was prohibited. The post stated, “If we find any of our partners using Unicommerce services, we would take strict action including but not limited to imposing penalties or blocking the concerned partner entirely.”

The Court Orders

To understand what went inside the courts, Inc42 has gotten access to the court orders issued on 21 April by Justice Vipin Sanghi, which throw light on the status of proceedings.

Unicommerce shall not use Paytm’s logo on its website

Court Order: Learned senior counsel for the defendant (Unicommerce), on instructions, states that the defendant has stopped using the Paytm trademark/logo on its website/portal since the plaintiff has objected to the same. The defendant is only using Paytm in normal font with a view only to describe the plaintiff and for no other purpose. The defendant shall remain bound by this statement and shall not use the trademark i.e. the logo of the plaintiff on its website.

A Paytm spokesperson commented on the order, “The honourable court has instructed Unicommerce to not use the Paytm logo and trademark and remain bound by the instruction. The honourable court has instructed Unicommerce to remain bound to this judgement. Unicommerce accepted that they were using the logo and will not use it anymore.”

Unicommerce to pull down YouTube video with Paytm’s logo within a week

Court order: Learned senior counsel for the defendant, on instructions, has submitted that the YouTube video of the defendant, which contains the logo of the plaintiff, shall be pulled down and suitable modified to remove the logo of the plaintiff. Let the same be done within a week.

A Paytm spokesperson commented that this clearly implied that the honourable court has further instructed Unicommerce to pull down the YouTube videos where the Paytm logo was being used.

Unicommerce shall not access information derived on behalf of Paytm’s sellers

Court order: Learned senior counsel, on instructions, has also undertaken that the defendant shall not access the information derived on behalf of the defendant’s customers i.e. the sellers who are registered with the plaintiff and with the defendant, and shall not use the said data for itself. 

A Paytm spokesperson commented on this, “Unicommerce has been instructed not to access the customers’ data and the sellers’ data which was being used to sign up sellers for our competition. They have also submitted that they will not derive any information such as sales analysis or user behaviour for any misuse. This is an important point since this data might have been used unduly by our competition.”

Data will be available exclusively to Paytm sellers

Court order: The same shall be made available exclusively to the sellers, when they access the same on the defendant’s site.

As per the Paytm spokesperson, the order clearly states that sellers can only view this information and they cannot submit anything back such as catalogue information, inventory, pricing or create any order processing changes or catalogue changes in our systems. This effectively prevents any changes from happening into Paytm data and systems.

Unicommerce not to crawl information from Paytm’s site

The defendant’s( Unicommerce’s) counsel stated that the defendant is not crawling on the site of the plaintiff but is merely accessing the site of the plaintiff (Paytm) as representative of its customers-who are sellers of the plaintiff, upon their authorization. The defendant shall remain by this statement as well.

As per Paytm, this particular ruling in the order is extremely critical since now Unicommerce won’t be able to crawl any information from Paytm’s panels and site. Instead, it can only give links that further provide access to Paytm systems to the merchant. This ruling is clear in stating that Unicommerce cannot fetch information from Paytm’s system but can only direct sellers to Paytm. The court has instructed Unicommerce to remain bound by this condition.

The Unicomerce Story

Unicommerce meanwhile has denied all these allegations and has a different story to tell. As per a Unicommerce spokesperson, “All interim injunctions sought by Paytm were denied by the Hon’ble Court in its interim order dated 21.04.2016. Paytm’s plea to restrain Unicommerce from using the word “PayTM” was denied. Unicommerce was held free to use the word PayTM in normal font, should it so desire.”

The spokesperson also stated that Paytm’s plea for an injunction against use of its logo wasn’t granted since Unicommerce confirmed in court that it had discontinued the use of the Paytm logo since December 2015. It agreed to be bound by its current practice and not use the same in the future as well. An old YouTube video with the logo was cited by Paytm and Unicommerce agreed and has removed the logo from the said old video.

Referring to Paytm’s plea to restrain Unicommerce from accessing information derived from its sellers, the spokesperson added that it was also denied. As per the statement, “The Court found no reason to change the status quo of Unicommerce accessing the seller data as a representative of the seller and making such data available back to them. Unicommerce clarified in Court that the seller data is accessed with the consent of the sellers in order to help the sellers improve their business and it does not use it for itself.”

The Fundamental Problem: Who Owns What Data?

Interestingly, Paytm’s and Unicommerce’s tussle over data is another one in the rising cases of companies taking legal recourse to assert their right over data. Case in point being the recent Uber-Ola case where Uber sued rival Ola, of creating over 90,000 rider accounts on Uber’s platform under fake names, email IDs and untraceable phone numbers, making over 400,000 false bookings and then cancelling them to ‘induce the termination/ frustration of driver partner contracts’, and spreading false messages to Uber drivers to either get them shifted to Ola platform and with intent to incur losses to Uber. Uber claimed that over 20,000 drivers left the company platform due to Ola’s wrongdoing. Therefore it is seeking damages worth $7 Mn (INR 50 Cr) from Ola.

However in Paytm and Unicommerce case, Paytm has not yet been able to clearly pinpoint if it incurred any harm or damages to business due to Unicommerce’s use of Paytm’s logo or on account of its access to the sellers’ data or on account of it crawling the Paytm site.

Angel investor Ajeet Khurana points out that this case highlights the fundamental problem of data sharing between intermediaries and ecommerce players. Ajeet says, “Taking into account the large number of ecommerce players and their intermediaries, the availability of data at various levels of supply chain will always be there. Intrinsically, the architecture of ecommerce system is such that it is difficult to control availability of data at various levels. And all ecommerce guys (such as Paytm) encourage intermediaries (like Unicommerce) so this is not a one off case. The thing is in India we are new to this space and have lower level of sensitivity towards data and privacy. Culturally, we value hardware more. So people have not largely understood the ethics around data/privacy. Hence more and more such cases are bound to crop as we delve deeper into this space.”

He added, “In this particular case, one needs to look at what kind of data did Unicommerce have access to and did it in any way harm Paytm? Did it misuse Paytm’s logo in any way? Every shopping engine or price monitoring engine will crawl. When you crawl a website, you can only see what the website wants to show you. If Paytm can show what harm has Unicommerce caused by crawling, then it would make for a stronger case.  All in all, the case highlights the fact that we need to be more conscious of what data belongs to whom. In a way, it is good that this debate has begun to happen in India as we delve more and more into understanding data ownership and privacy issues.”

Interestingly, the case might also have something more to do with the fact that Paytm’s competition with Snapdeal in the area of payments and ecommerce. Snapdeal started as a marketplace and then acquired Freecharge to enter the payments business. Paytm in turn started as a digital payments platform and later made its foray into the marketplace business. The case even gets more interesting when one recalls that both Snapdeal and Paytm count Chinese ecommerce giant Alibaba as a formidable investor.

Meanwhile Unicommerce has been given two weeks to file a reply and submit documents while Paytm will file a rejoinder in the two weeks thereafter. The matter will be heard again on July 11.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.