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”
- Explosive Growth, Legal Scrutiny, and a “Cost of Doing Business” Approach
- How Does the AI Scraping Work?
- Independent Designers Most at Risk
- Global Implications and International Copyright Battles
- Obfuscation of Responsibility and Calls for Reform
- Looking Ahead
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?
According to complaints and legal analysis, Shein’s AI doesn’t just spot trends but systematically collects, organizes, and duplicates original works—providing suppliers with bespoke data packets for manufacturing.
Shein gives its suppliers the designs it wants them to manufacture based on data from its surveillance and scraping programs, and the manufacturers do not independently choose the products they create for Shein.
Some recent lawsuits also highlight the practice of Shein’s AI scraping art from platforms like TikTok, Instagram, and designer portfolio websites.
Independent Designers Most at Risk
The suit underlines that small or independent designers, businesses, and artists are most vulnerable… and have little means to constantly search Shein’s massive catalogue for infringement. Legal experts note these disputes highlight how difficult it remains for original creators to police or enforce their rights in the global e-commerce era.
Cases like the lawsuit by Brandy Melville against Shein and third-party sellers for gray market goods show how platforms can obscure accountability.
Global Implications and International Copyright Battles
Recent years have seen Shein’s copyright practices challenged not just in the US, but in courts worldwide. Notably, H&M has ongoing litigation against Shein in Hong Kong for infringement of knitwear and swimwear, while UNIQLO is suing Shein for copying its popular shoulder bag in Japan.
These cases reveal the complexities of applying and enforcing copyright in cross-border e-commerce and the speed at which fast-fashion brands can replicate original work.
Obfuscation of Responsibility and Calls for Reform
Shein is accused of operating through a complicated corporate network designed to obfuscate responsibility, making it hard for victims to pinpoint legal liability within Shein’s numerous global subsidiaries. Legal writers warn that this could create a precedent for e-commerce platforms and AI-driven brands to sidestep IP responsibility.
Looking Ahead
The Shein case stands as a watershed test for design protection in the digital era. As lawsuits mount globally, and as debates heat up over responsible AI, legal experts and fashion leaders are watching for court outcomes that could shape future e-commerce, copyright enforcement, and creative livelihoods.
