Online shopping giant Temu is suing rival Shein, claiming the fast fashion giant is using "mafia-style" intimidation tactics against merchants. In the lawsuit filed on Wednesday, Temu said Shein has adopted increasingly aggressive tactics to "unlawfully interfere with Temu's business," including intimidating merchants who list products on both platforms and issuing tens of thousands of illegal copyright takedown complaints.
The indictment states: "Shein has recently even falsely accused or even detained merchants who did business with Temu, including detaining merchant representatives in Shein's office for several hours. Shein confiscated merchants' electronic devices, obtained Temu's proprietary information through merchants' seller accounts, and threatened merchants who did business with Temu that they would be punished."
Shein did not immediately respond to a request for comment.
This is not the first time the two companies have clashed in court. Bloomberg reports that the two companies have previously filed lawsuits against each other, including a case earlier this year in which Temu accused Shein of bullying manufacturers in an attempt to prevent them from working with the market. In a separate case, Shein accused Temu of instructing influencers to make "false and deceptive statements" about Shein when promoting Temu. Both lawsuits were dropped in October.
A lawsuit filed this week sheds rare light on the business dealings of Temu, a sprawling online superstore that has grown rapidly in the U.S. with low prices. For example, the lawsuit alleges that more than 100,000 images are uploaded to Temu.com every day and that it receives an average of 170 copyright removal requests per day, 63% of which come from Shein.
The lawsuit comes as Shein prepares to launch in the United States in 2024. But the company has been embroiled in controversy for years over its labor practices, supply chain and model of selling replicas of goods from small businesses. Shein has tried to fend off some criticism: In 2022, the company said it would spend $15 million to improve factory standards after a report found workers worked too long hours and were illegally docked wages. In addition, Shein has held multiple live events across the country in an attempt to interact directly with shoppers.