Temu, a fast-fashion retailer, has taken legal action against rival Shein, alleging the use of "mafia-style intimidation" tactics to secure a competitive advantage, intensifying their ongoing feud.
The lawsuit, filed by Temu's US-based parent company WhaleCo, alleges that Shein has used its dominance in ultra-fast fashion to restrict Temu's access to suppliers, interfere with operations, and intimidate employees and suppliers, as per Fox Business.
Chinese Fashion Giants Face Allegations
This photo illustration shows the Shein app on the App Store reflected in the Temu logo, in Washington, DC, on February 23, 2023.
The legal dispute between the two popular Chinese fashion companies has escalated following their respective entries into the United States market. Shein made its debut in 2019, while Temu followed suit in 2022.
The brands, renowned for their affordable and fashionable products, have come under intense scrutiny due to allegations surrounding their business practices. These allegations include claims of forced labor, exploitation, and intellectual property theft.
In the latest lawsuit filed by Temu, they have accused Shein of engaging in malicious and unlawful conduct. The allegations include false imprisonment of merchants associated with Temu, manipulation of US copyright law, and the use of coercive measures such as physical detention and threats against individuals collaborating with Temu.
According to the complaint, it is alleged that Shein's actions have intensified in anticipation of Temu's Super Bowl LVIII advertising campaign scheduled for February 2024.
The ongoing legal dispute between the two companies is part of a series of lawsuits. In a legal battle that took place last December, Shein, the popular online fashion retailer, took legal action against Temu.
Shein accused Temu of engaging social media influencers to spread fabricated and misleading claims about the company. In a recent development, Temu has taken legal action against Shein, alleging that the company has engaged in antitrust violations in order to uphold its dominant position in the fast-fashion industry.
Both companies have faced public scrutiny for their ethical practices, with criticisms ranging from the use of forced labor to exploitation and product safety concerns. While popular for their affordability, the brands have also faced backlash from consumers, according to USA Today.
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Temu Accuses Shein of Coercion and IP Misuse
The lawsuit comes just two months after both companies sought to end their legal disputes, requesting dismissals "without prejudice." Shein, valued at $100 billion, is gearing up for a highly anticipated initial public offering, potentially taking place next year.
Temu's parent company, WhaleCo, alleges that Shein has misused intellectual property legislation to disrupt Temu's operations and unlawfully copy its intellectual property. The complaint details Shein's alleged coercive measures, including summoning Temu's suppliers under false pretenses, detaining them for hours, seizing personal devices, and making threats to discourage collaboration with Temu.
Shein has dismissed the lawsuit as "without merit" and expressed its intention to vigorously defend itself. The fashion rivalry, marked by aggressive legal actions, showcases the challenges and controversies within the fast-fashion industry.
As Temu continues to gain momentum in the US market, this legal battle raises questions about the practices and competition dynamics in the ultra-fast fashion sector, prompting a closer examination of both companies' actions behind their public facades, The Guardian reported.
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