Shein, the Chinese fast-fashion giant, is embroiled in nearly 100 lawsuit cases filed in United States courts, highlighting many legal challenges that threaten to tarnish its rapid ascent in the global retail market. The allegations against Shein are diverse and severe, ranging from copyright infringement and data scraping to unethical labor practices and environmental violations.
Independent artists and designers have accused the company of using AI algorithms and artificial intelligence to systematically steal their designs, leading to numerous copyright infringement lawsuits. Additionally, Shein faces accusations of exploiting workers, including claims of forced labor in its supply chain, and contributing significantly to environmental degradation through its unsustainable production practices. Here’s a detailed look at the myriad lawsuits Shein is currently grappling with.
Copyright Infringement and Racketeering Allegations
One of the most significant legal battles Shein faces is a class action lawsuit alleging widespread copyright infringement and racketeering; the lawsuit claims that Shein uses AI algorithms and data scraping techniques to steal designs. The Financial Times (FT), which initially reported the news, said that the total number of copyright cases against Shein is understood to have grown to nearly 100, according to legal filings.
“At least 93 different designers and companies have filed lawsuits in US federal courts against Shein for alleged copyright or trademark infringement since 2018”, the FT outlet said. According to court documents, Shein's business model involves monitoring online platforms like Instagram and TikTok to identify trending designs. These designs are then replicated and sold without permission.
Lawsuits from Independent Designers
In April 2024, artist Alan Giana filed a lawsuit against Shein, accusing the fast-fashion giant of using its algorithmic technology to copy his artwork without permission and sell the designs through its app. Giana, who has been creating and licensing art for over 30 years, specifically cited his original work "Coastal Escape" as being replicated by Shein in a product listing titled “Beach Print DIY Diamond Painting Without Frame.” The lawsuit claims that Shein employs sophisticated electronic systems to scour the internet for popular works, which are then misappropriated and sold without notice or attribution to the original artists.
Lawsuits from Established Retailers
Among the notable established retailers plaintiffs are Victoria's Secret-backed For Love and Lemons, which filed suit on January 22, 2024, alleging that Shein copied their designs. Uniqlo has also taken legal action against Shein, particularly over claims that Shein's bags closely resemble Uniqlo's viral "Mary Poppins" shoulder bag, with the lawsuit filed in Tokyo. H&M joined the fray last summer, filing a lawsuit in Hong Kong that included photographic evidence of Shein allegedly copying their swimwear and sweaters. Additionally, Oakley and Ralph Lauren sued Shein, adding to the growing list of major brands accusing the company of intellectual property theft.
Temu vs. Shein: A Battle of Fast-Fashion Titans
The rivalry between Shein and Temu has escalated into a fierce legal confrontation, with Temu accusing Shein of employing "mafia-style" tactics to intimidate suppliers and disrupt its business operations. In a 100-page complaint filed on December 13, 2023, in Washington D.C., Temu's parent company, Whaleco Inc., alleges that Shein has been summoning suppliers to its offices under false pretenses, detaining them for hours, seizing their phones, and coercing them into signing exclusive agreements. These actions are part of what Temu describes as an anticompetitive scheme to monopolize the ultra-fast fashion market by blocking Temu's access to essential suppliers.
Forced Labor Allegations
Both Shein and Temu are under investigation by a U.S. House committee for allegedly using forced labor from the Xinjiang region in China. The U.S. State Department has highlighted the plight of the Uyghur population in Xinjiang, where forced labor practices are reportedly rampant. These allegations have legal and significant political implications, especially as Shein seeks to expand its market presence in the United States.
Environmental and Ethical Concerns
Shein's rapid production cycles and low-cost products have raised serious environmental and ethical concerns. The fast fashion giant is notorious for contributing to excessive textile waste, water pollution, and greenhouse gas emissions. Producing between 35,000 to 100,000 items daily, Shein generates around 6.3 million tons of CO2 annually, equivalent to the emissions from approximately 180 coal-fired power plants. This unsustainable model exacerbates the climate crisis, with the fashion industry already responsible for over 10% of global carbon emissions.
Intellectual Property Disputes
Shein has faced numerous intellectual property infringement lawsuits, with the Wall Street Journal reporting over 50 pending cases. These lawsuits often involve claims from artists and designers who accuse Shein of copying their work without authorization. The company's alleged use of secretive algorithms to identify and replicate popular designs has been a focal point in many legal battles.
RICO Violations
In a high-profile case, three designers have accused Shein of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act. The lawsuit claims that Shein coordinated efforts to infringe on copyrights and sell counterfeit items. This case adds another layer of complexity to Shein's legal challenges, as RICO violations carry severe penalties and can significantly impact the company's operations.
Breaching Legal Settlements
Shein, the Chinese fast-fashion giant, has repeatedly been embroiled in legal controversies over counterfeit goods. For instance, Oakley and Ralph Lauren sued Shein for intellectual property violations, accusing the retailer of using their designs without permission. Despite previous settlements with Oakley, Shein continues to face accusations of selling counterfeit items. In a recent legal filing initiated by Oakley, Shein was described as "repeat counterfeiters."
Conclusion
Overall, Shein's legal troubles span copyright infringement, counterfeiting, breached settlements, and severe labor law violations, painting a picture of widespread issues within the company. In response, Shein claims to take infringement allegations seriously and has invested in systems to detect and prevent such issues. However, the persistent legal troubles and mounting pressure have cast a shadow over Shein's operations, primarily as it seeks to file an IPO in the U.S., facing significant backlash from politicians and scrutiny over its business practices.
