A proposed class action lawsuit is shaking the global fashion industry, alleging that Chinese e-commerce giant Shein uses artificial intelligence to systematically find, copy, and sell copyrighted designs on a mass scale without attribution or compensation to the original artists. As the case unfolds, industry insiders and designers are raising urgent questions about digital surveillance, intellectual property, and ethical AI use in e-commerce.
Shein’s Alleged Business Model of “Systemic Theft of Intellectual Property”
The core accusation is that Shein’s business model is fundamentally based on, as the lawsuit charges, systemic theft of intellectual property. The 42-page complaint details Shein’s use of proprietary online surveillance—including data mining, algorithms, and AI—to track consumer trends in real time, especially on social media and art platforms, to identify trending products or designs it expects to be commercially successful.
The suit alleges Shein has gone beyond trend tracking and now systematically scrapes user and designer…
data both on its own pages and across the internet: vacuuming up copyrighted works and then mass-manufacturing lookalikes.
Explosive Growth, Legal Scrutiny, and a “Cost of Doing Business” Approach Shein’s explosive success is quantified by its jaw-dropping growth: Annual revenue skyrocketed from ~$3 billion in 2019 to $10 billion in 2020, and over $30 billion in 2023. Yet as it grew, so did controversy.
The lawsuit treats the costs of litigating and settling copyright infringement claims as a necessary business expense, which it builds into its financial models.
High-profile suits have come from both major brands (like Oakley, Ralph Lauren, UNIQLO, Brandy Melville, H&M) and independent creators, with some cases citing direct, contributory, and vicarious copyright infringement, false designation of origin, and unfair competition. How Does the AI Scraping Work?…
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