In a civil complaint filed in Washington DC, Shein alleged that Temu encourages sellers to steal other brands' designs, and then prevents the sellers from removing the products from the platform, even when the seller admits to infringement. Well isn't that the pot calling the kettle black!
In a complaint filed to the federal court in Washington on Monday, Shein also claims that:
- Temu is counterfeiting goods, stealing trade secrets, and confusing its customers with an “illegal” business model.
- Temu directed sellers to copy its products after a Temu employee stole sales data and pricing information about best selling items on Shein.
- Temu encouraged sellers to use copyrighted images of Shein products on their listings, ran ads that appeared to be from Shein but actually directed viewers to Temu's website, and paid influencers to make false claims about Shein goods.
Temu rebutes Shein's accusations. A spokesperson told Nikkei Asia, “The audacity is unbelievable. Shein, buried under its own mountain of IP lawsuits, has the nerve to fabricate accusations against others for the very misconduct they're repeatedly sued for.”
The spokesperson is referring to the fact that Shein has previously been sued by Uniqlo, H&M and Levi Strauss over similar allegations.
To be fair, some of the evidence is pretty damning. Check out the image on CNBC (about halfway down the article) that shows Shein designs vs Temu designs.
If these allegations feel familiar, it's because Shein and Temu have previously been involved in lawsuits against one another.
- December 2022: Shein accused Temu of paying social media influencers to make “false and deceptive statements” against the company in their promotions of Temu, and tricking customers into downloading the Temu app using “imposter” social media accounts.
- July 2023: Temu accused Shein of violating US antitrust laws by abusing its market power and forcing manufacturers to sign loyalty oaths certifying that they will not do business with Temu.
- October 2023: The two companies called a truce. Their lawyers filed joint declarations requesting that the two legal cases be dismissed “without prejudice” by their judges. The filings did not contain details on why they decided to drop their complaints or whether any settlement had been made, and neither company has made a public statement about dropping the suits.
Apparently the truce didn't last very long. So back to court for these companies? Maybe. Maybe not. Perhaps another truce is in their future to avoid digging too deep into allegations against either company, especially as Shein prepares for an IPO.
In other Shein news… Shein found two cases of child labor at its suppliers last year, according to its 2023 sustainability report. The company says it had suspended orders from the suppliers that had employed children under 16, only continuing to do business with them after they had strengthened their processes, including checking workers' identity documents.
Previously, suppliers employing minors had 30 days to resolve the issue before Shein would cut ties, but the company tightened its supplier policy last October after the child labor cases were found, so that any severe breaches would result in ending the relationship with the supplier immediately.