Temu accused Shein of «mafia style» practices

In the latest chapter of the saga of Shein's legal troubles, Temu has filed a lawsuit against the Chinese fast-fashion giant, accusing it of orchestrating a "mafia-style" campaign to hinder Temu's growth in the US market. A 100-page document analyzed by The Fashion Law outlines a subtle and multifaceted strategy, including various allegedly undertaken actions. According to Temu, Shein forced thousands of suppliers to sign non-competition contracts, allowing the seizure of their intellectual property rights worldwide, preventing suppliers from listing similar products on Temu or other platforms, using intimidation tactics, and compelling suppliers to use anti-competitive pricing to hinder the rival. Another accusation concerns manipulation of intellectual property rights: Shein is accused of relying on illegally seized intellectual property rights to obtain improper copyright registrations from the US Copyright Office using false information and backdated transfers. In addition to intellectual property claims, Temu accuses Shein of antitrust violations, claiming that Shein engaged in anti-competitive practices through exclusive deals and loyalty attestations, as well as monopolistic behavior and exclusionary practices in the ultra-fast-fashion market, alleging that Shein's anti-competitive practices have significantly reduced competition or tend to create a monopoly in the US market. But it doesn't end here – rather, the accusations become more over the top with each new point.

Temu also claimed that Shein inundated them with thousands of non-compliant DMCA takedown notices (Digital Millennium Copyright Act. The DMCA is a US law providing regulations to protect copyrights in the digital environment. DMCA procedures refer to actions and guidelines that online platforms and web services must follow when receiving notices of alleged copyright infringement) falsely claiming copyright violations, even when Shein had no valid ownership basis. Furthermore, Shein is accused of instigating and supporting questionable copyright infringement lawsuits against Temu, which Temu claims are baseless and part of an attempt to disrupt operations. As if that wasn't enough, Shein has also been accused of violating Temu's copyrights in mobile games and copying its distinctive trade dress (this term refers to the overall visual appearance of a product or service that can serve as a distinctive identifier of the commercial origin, including aesthetic, design, colors, graphics, packaging, and other visual elements), stating that Shein hired key marketing personnel with access to confidential information. And finally, at the climax of the accusation, Temu alleges that Shein physically kidnapped merchants doing business with Temu in Shein's offices, confiscating their electronic devices used to access Temu's confidential information through their business accounts.

This legal battle between Temu and Shein unfolds against the backdrop of their fierce competition in the US market. Despite Shein's previous dominance, Temu's success reportedly led to a significant decline in Shein's valuation, highlighting the importance of this legal dispute. As these fast-fashion giants vie for market supremacy, the lawsuit raises crucial questions about fair competition, intellectual property protection, and the limits of antitrust laws in a rapidly evolving industry. The outcome of this legal battle will undoubtedly shape the future of the ultra-fast-fashion market.