For decades, the fashion industry’s legal battles were primarily about “lookalike” designs or trademark squabbles. However, the emergence of the “ultra fast fashion” model, characterized by hyper speed supply chains and near zero margins, has birthed a new kind of legal warfare.
In 2025, the rivalry between Shein (the established leader) and Temu (the aggressive challenger owned by PDD Holdings) escalated into a series of unprecedented lawsuits in U.S. federal courts. This conflict is unique because it attempts to apply RICO (Racketeer Influenced and Corrupt Organizations Act), a law originally designed to take down the Mafia, to the world of retail.
It marks a shift from defending products to attacking a competitor’s entire business existence. While the public sees a battle over $5 tshirts, the courtrooms see allegations of racketeering, illegal imprisonment, and industrial sabotage.
2. What Happened: The Allegations
The “Mafia-Style” Allegations (Temu’s Claims)
The “Industrial Theft” Allegations (Shein’s Claims)
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Legal Claim
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Basis for Lawsuit
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2025 Court Status
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RICO (Racketeering)
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Alleged organized “scheme” of theft and intimidation.
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Mostly dismissed; courts found it a “commercial” rather than “criminal” enterprise.
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Antitrust (Monopoly)
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Foreclosing competition via exclusive supplier deals.
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Dismissed in Oct 2025; court ruled Shein’s actions didn’t harm U.S. competition law.
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Copyright & Trade Dress
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Stealing photos, designs, and the “look” of products.
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Proceeding to Trial remains the strongest legal path for both sides.
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3. Why This Case Matters: The “Legal Battlefield.”
This war highlights a critical evolution in the fashion industry, law as a competitive strategy, with both companies allegedly weaponizing the DMCA by using takedown notices not only to protect creative work but to temporarily choke a rival’s inventory and revenue. It all plays out within a jurisdictional tangle where two Chinese founded companies are battling in U.S. courts over conduct that largely occurs in China, testing how far American courts can reach into global supply chains.
At the same time, the conflict is accelerating a “race to the bottom” in which the real objective of litigation is less about winning a settlement and more about making operations so costly for the other side that they must raise prices or eventually exit the market. In a landscape where profit margins are razor thin, lawsuits become another lever in pricing and competition strategy rather than just a way to resolve disputes.
4. Lessons for Other Brands
The Shein vs. Temu war offers a sobering look at the future of global retail competition.
A. Supply Chain Resilience is Legal Protection
If your business relies on a small pool of shared suppliers, you are vulnerable to “exclusive dealing” attacks. Brands must diversify their manufacturing base so that a legal threat against one factory doesn’t paralyze their entire inventory.
B. The Danger of “Generic” IP
Because ultra fast fashion relies on “trending” designs, much of the IP is considered “weak.” The 2025 rulings show that while RICO and Antitrust claims are hard to prove, Copyright on original photography is the most enforceable weapon. Brands should invest in high quality, original content that is clearly registered and protected.
C. Legal Ethics and Reputation
While aggressive litigation can slow a rival, it also invites government scrutiny. In late 2025, the intense legal crossfire between Shein and Temu led to increased calls from the U.S. Congress for stricter regulations on all ultra fast fashion, including investigations into forced labor and tax loopholes (the de minimis exception).
D. Documentation is Everything
Temu’s “mafia style” claims were weakened because many of the alleged actions happened overseas with limited paper trails. For any brand facing intimidation or sabotage, maintaining a rigorous, “court ready” log of every interaction with suppliers and competitors is essential.
“In the ultra fast fashion war, the courtroom is just another department of the marketing team, used to raise the rival’s costs and dominate the digital shelf.”
Summary Table: The Strategy of Conflict
| Strategy | Goal | Risk |
| DMCA Bombing | Temporarily disable a rival’s best selling products. | Counter suits for “bad faith” filing. |
| Exclusive Supplier Deals | Starve the competitor of manufacturing capacity. | Antitrust investigations by the FTC or DOJ. |
| RICO Allegations | Create a “criminal” narrative to damage brand reputation. | High legal fees and likely dismissal by judges. |
| Poaching & Trade Secrets | Acquire the rival’s “secret sauce” (algorithms/suppliers). | Non compete litigation and theft of trade secret charges. |
