Chinese online retailer Temu filed a lawsuit in Massachusetts against rival Shein, claiming that Shein had blocked Temu from doing business with it in violation of American antitrust law.
Temu, a well-known Chinese e-commerce platform owned by Pinduoduo Inc., claims that Shein forced apparel producers to consent to unethical supply chain agreements barring them from cooperating with Temu after it entered the U.S. market in 2022.
Chinese online retailer Temu filed a lawsuit in Massachusetts against rival Shein, claiming that Shein had blocked Temu from doing business with it in violation of American antitrust law.
Temu, a well-known Chinese e-commerce platform owned by Pinduoduo Inc., claims that Shein forced apparel producers to consent to unethical supply chain agreements barring them from cooperating with Temu after it entered the U.S. market in 2022.
According to the complaint Temu filed with the U.S. on July 14, “Shein has engaged in a campaign of threats, intimidation, false assertions of infringement, attempts to impose baseless punitive fines, and has forced exclusive dealing arrangements on clothing manufacturers.
District of Massachusetts’s district court. In a statement sent through email, Temu claimed that Shein also penalized businesses that cooperated with Temu by levying “extrajudicial fines” and compelled stores to transfer their intellectual property rights to Shein so that Shein could enact legal action to protect those rights against other Temu users.
“For a very long time, we have shown great prudence and avoided taking legal action. The company said in a statement, “However, Shein’s intensifying attacks leave us with no choice but to pursue legal action to safeguard our rights, the rights of those merchants conducting business on Temu, as well as the consumers’ rights to a wide variety of reasonably priced products.
Shein did not provide AP with a response right away, but it had previously stated that the matter was “without merit” and that the company would fight the accusations.
Shein had already filed a lawsuit against Temu in Illinois, alleging that the company used dishonest business tactics and produced fake pages that infringed copyright and trademark laws.
The prevalent practice of Chinese internet corporations of requiring suppliers, brands, and retailers to conduct business solely with them has come under fire from the country’s regulators.
As imports to the United States through their platforms have increased, both Shein and Temu have drawn notice. Only a few days ago, Shein was charged with racketeering-level copyright infringement in California by three American fashion designers.
The Racketeer Influenced and Corrupt Organizations Act, also known as RICO, was created to pursue organized crime, and the lawsuit claims that the company has violated it.
Both firms’ compliance with initiatives to stop products created with forced labor from being sold on their platforms was called into doubt in a congressional report released last month.
Legislators have been lobbied by the “Shut Down Shein” alliance of businesses and human rights activists in an effort to tighten regulations on the fast fashion website.
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