The Delhi High Court has granted relief to mobile marketplace Paytm by restraining a unit of rival Snapdeal from using any information derived from sellers transacting on the Paytm platform.
Paytm, which has Alibaba as an investor, has filed a suit alleging that confidential data relating to Paytm has been accessed by Snapdeal through its unit Unicommerce, allowing it an unfair advantage. Unicommerce denies the allegation.
The court also directed Unicommerce to pull down its YouTube advertisement and / or modify it to remove the Paytm logo.
Unicommerce, which provides the software that helps operate online marketplaces, however claimed that the "reliefs sought (by Paytm) have not been granted. We welcome the honourable court's interim order. While the matter is sub-judice, we believe that the allegations made are clearly unfounded and speculative." The case will be heard next on 11 July.
Snapdeal's main investor is Japan's SoftBank. It competes with Flipkart, Amazon, Shop-Clues and Paytm. It did not immediately comment.
Ecommerce companies, particularly online retailers, rely heavily on data and view it as a source of competitive advantage. It forms the basis of strategy, is a source of revenue, and can even make the difference between the success and failure of business.
While data is guarded jealously, new-economy companies have shown that they are not shy of legal fights to secure or protect what they believe are their rights. Last month, taxi-hailing app Uber sued rival Ola, accusing it of a campaign of tricks designed to subvert its business, allegations that Ola denies.
Hotel rooms aggregator OYO went to court alleging that rival ZO was stealing its software, but the two of them later decided to merge.
In blog post on its website headlined, "We discourage the use of Unicommerce!" Paytm said it has informed sellers transacting on its platform that using Unicommerce was prohibited.
"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," Paytm said.
It did not immediately provide comment on Thursday's court hearing.