HONG KONG (AP) — Chinese e-commerce retailer Temu has filed a lawsuit in Massachusetts accusing rival Shein of violating U.S. antitrust law by preventing clothing manufacturers from doing business with it.
Temu, owned by popular Chinese e-commerce site Pinduoduo Inc., alleges that Shein forced clothing manufacturers into unfair supply chain agreements that prevent them from working with Temu after it entered the US market in 2022.
Shein (SHE-in) and Temu (TEE-mu) are fast growing online shopping platforms. Shein has taken over the largest share of the fast fashion market in the US, with more than 50%, according to Temu’s complaint. Temu is the most downloaded app in the US, according to website data.ai, formerly App Annie, which tracks app rankings. It offers everything from clothing to housewares at equally competitive prices.
“Shein has engaged in a campaign of threats, intimidation, false claims of violations and attempts to impose unsubstantiated punitive fines and has forced exclusive business agreements with apparel manufacturers,” according to the complaint Temu filed on July 14 with the US District Court for the District of Massachusetts.
In an emailed statement, Temu said Shein also punished merchants who worked with Temu by imposing “extrajudicial fines” and forced retailers to sign over their intellectual property rights to Shein, which could then try to enforce these rights against them. who also operate in Temu.
“For a long time, we have exercised significant restraint and refrained from legal action. However, the increasing attacks by Shein leave us with no choice but to take legal action to defend our rights and the rights of merchants doing business in Temu, as well as the rights of consumers to a wide variety of affordable products,” he said. the retailer in the statement. statement.
Shein did not immediately respond to the AP with comment, though he previously said the case was “without merit” and the firm would defend itself against the allegations.
Shein previously sued Temu in Illinois, claiming he engaged in deceptive business practices and created imposter pages that violated copyrights and trademarks.
Regulators in China have cracked down on the widespread practice by internet companies of forcing retailers, brands and suppliers to work exclusively with them.
Both Shein and Temu have drawn attention as imports into the US through their platforms have increased.
Just a few days ago, a presentation in california by three American fashion designers have accused Shein of copyright infringement so aggressive it amounts to extortion. The filing alleges that the company has violated the Fraud Influenced and Corrupt Organizations Act, better known as RICO, a law originally designed to prosecute organized crime.
TO Congress report published last month questioned the compliance of both companies with efforts to prevent products made through forced labor from being sold on their platforms.
An anonymous coalition of brands and human rights advocates called “Shut Down Shein” has been lobbying lawmakers seeking to increase scrutiny on the fast-fashion site.