Temu, the fast-fashion retailer, has filed a lawsuit against its rival Shein, claiming that Shein employed “mafia-style intimidation” tactics to maintain a competitive advantage in the market.
In the lawsuit filed in Washington, D.C., Temu alleges that Shein utilized its “dominance in ultra-fast fashion” to prevent Temu from accessing suppliers.
Shein, reportedly in the process of filing for an initial public offering (IPO) in the U.S. approximately two weeks ago, is accused in the suit of employing tactics such as “exclusive dealing agreements, mafia-style intimidation of suppliers, and anticompetitive pricing floor requirements.” It’s noteworthy that both companies have connections to China. a lawsuit against
Responding to the allegations, a spokesperson for Shein informed FOX Business that the company believes the lawsuit lacks merit. Shein intends to vigorously defend itself against the accusations.
Temu stated to FOX Business, “Their actions were too exaggerated. We had no choice but to sue them.” According to Temu, Shein employed “detention scare tactics against suppliers who dare to sell to Temu, including false imprisonment and seizure of cell phones during meetings Shein calls on false pretenses.”
Temu also claimed in the suit that Shein sends DMCA takedown notices to suppliers who list their products on Temu. A DMCA takedown is when content is removed from a platform at the request of the owner of the content.
According to the lawsuit, Temu claimed Shein resorted to some of these “coercive measures” in the months leading up to its advertising campaign for the Super Bowl in February 2024.