E-commerce giant Flipkart is now taking several companies to court as the company has not been paid for the advertisements that have been placed on its website. The dues are in the range of Rs 90,000 to crores of rupees each.
Few of the defaulters include My-Popcorn, Western Digital.
While Flipart does not have a pre-payment system, Amazon charges the smaller companies before placing the advertisements and allows the bigger companies to clear the payment later.
The Internet and Mobile Association of India is now setting up a committee to develop a payment mechanism system which will follow up on payments and defaults with advertisers and digital networks on a regular basis.
Flipkart had earlier stated that its now changing its business model and will focus on profitability and sustainability. It also plans to shut down many categories in next six months which are not profitable.