Temu files lawsuit in US against rival Shein, alleges antitrust violations

Chinese e-retailer Temu has filed a lawsuit in Massachusetts accusing its rival Shein of violating US antitrust law by preventing apparel makers from doing business with it.

Temu, which is owned by popular Chinese e-commerce site Pinduoduo Inc. , that Shein has forced apparel manufacturers to submit to unfair supply chain arrangements that prevent them from doing business with Temu after it enters the US market in 2022.

Shein (SHE-in) and Temu (TEE-mu) are fast-rising online shopping platforms. Shein captured the largest share of the fast-fashion market in the United States, at more than 50 percent, according to Temu’s complaint.

Temu is the most downloaded app in the United States, according to data from the website, formerly App Annie, which tracks app ratings. It offers everything from apparel to home goods at similarly competitive prices.

Shein has engaged in a campaign of threats, intimidation, false assertions of infringement, and attempts to impose baseless punitive fines and impose exclusive trading arrangements on garment manufacturers, according to the complaint filed July 14 by Temu with US District Court. from Massachusetts.

In an emailed statement, Teemo said Shin also punished merchants who worked with Timo by imposing extrajudicial fines “and forced retailers to surrender their intellectual property rights to Shin, which could then seek to enforce those rights.” against those who also work for Timo.

For a long time, we exercised great restraint and refrained from pursuing legal action. However, Shein’s escalating attacks leave us no choice but to take legal action to defend our rights and those of those merchants who do business on Temu, as well as the rights of consumers to a variety of affordable products, the retailer said in the statement. .

Shein did not immediately respond to the AP with a comment, though she previously said the case was without merit and that the company would defend itself against the allegations.

Earlier, Shein sued Temu in Illinois, alleging that she engaged in deceptive business practices and created fraudulent copyright and trademark infringement pages.

Regulators in China have cracked down on the widespread practice of internet companies there to force retailers, brands and suppliers to work with them exclusively.

Shein and Temu both garnered interest as imports to the US increased via their platforms.

Just days ago, a report filed by three California-based American fashion designers accused Shine of copyright infringement so aggressively that it amounted to extortion. The suit alleges that the company violated the Racketeer Influenced and Corrupt Organizations Act, better known as RICO, a law originally designed to prosecute organized crime.

A congressional report published last month questioned the companies’ compliance with efforts to prevent forced labor from being sold on their platforms.

An anonymous coalition of brands and advocates called Shut Down Shein has lobbied lawmakers seeking increased scrutiny of the fast-fashion site.