HONG KONG (AP) – Chinese e-commerce retailer Temu has filed a lawsuit in Massachusetts, accusing rival Shein of violating US antitrust laws by preventing cooperation with clothing manufacturers.
Tem, which is owned by popular Chinese e-commerce site Pinduoduo, claims Shane forced clothing makers to follow unfair supply chain arrangements that prevent it from partnering with Tem after it enters the U.S. market in 2022.
Shein (SHE-in) and Temu (TEE-mu) are fast-growing online shopping platforms. Tem alleges that Shane holds the largest share of the U.S. fast fashion market, more than 50%. According to data.ai, a website that tracks app rankings (formerly App Annie), Temu is the most downloaded app in the US. We offer everything from apparel to homewares at equally competitive prices.
According to the complaint filed July 14 in the United States District Court for the District of Massachusetts by Mr. Temm, “Mr. Shein engaged in threats, intimidation, false allegations of infringement, unsubstantiated punitive fines, and coerced the apparel manufacturer into exclusive dealing arrangements.”
In an emailed statement, Mr. Tem said Shane also punished distributors who cooperated with Tem by imposing “extrajudicial fines,” coercing retailers to transfer their intellectual property rights to Shane, who in turn may seek to enforce those rights against those who operate Tem.
“For a long time, we have exercised significant restraint and refrained from taking legal action. However, as Shayne’s attacks escalate, we have no choice but to take legal action to protect our rights, the rights of merchants doing business in Temu, and the rights of consumers to a range of affordable products,” the retailer said in a statement.
Shein did not immediately return a comment to The Associated Press, which previously said the lawsuit was “without merit” and that the company would defend the allegations.
Earlier, Mr. Shein sued Tem in Illinois, alleging that Tem engaged in deceptive commercial practices and created counterfeit pages that infringed copyrights and trademarks.
Chinese regulators have cracked down on the widespread practice by Chinese internet companies of forcing exclusive cooperation with retailers, brands and suppliers.
Both Shein and Temu have seen a surge in imports into the US via their platforms.
Just a few days ago, three American fashion designers filed a lawsuit in California, accusing Shane of overly aggressive copyright infringement amounting to blackmail. The complaint alleges that the company violated a law originally enacted to prosecute organized crime, known as RICO, known as the RICO.
A congressional report released last month questioned the companies’ adherence to efforts to prevent goods made with forced labor from being sold on their platforms.
An anonymous coalition of brands and human rights groups called Shutdown Shane is lobbying lawmakers for increased scrutiny of fast-fashion sites.
