In Lawsuit, Temu Accuses Rival Shein of ‘Mafia-Style’ Tactics
Temu, the popular low-cost online marketplace, is suing fast-fashion brand Shein over using “mafia-style” methods to lower competition, according to a lawsuit filed Dec. 13 in the U.S. District Court of the District of Columbia. The suit was filed by WhaleCo, Temu's U.S.-based parent company, alleging that Shein has intimidated Temu employees and suppliers and interfered with its operations.
More specifically, the complaint accuses Shein of "falsely imprisoning merchants doing business with Temu," allegedly detaining them in Shein's offices for hours and threatening merchants who work with Temu. Shein was also accused of manipulating U.S. copyright law by lodging unfounded copyright infringement suits, issuing bad-faith copyright takedown notices and illegally seizing IP rights to obtain improper copyright registrations.
According to the suit, Temu believes these incidents have increased leading up to a Super Bowl LVIII advertising campaign set for February 2024, which it believes will drive traffic to its site.
"Shein has resorted to even more desperate and coercive measures, including physical detention of merchants who dare to work with Temu, personal threats, and illegal seizures of merchants’ personal devices to obtain access to the merchants’ Temu accounts and Temu’s confidential information and trade secrets," the lawsuit claims.
Shein is denying the claims. According to an email sent to The New York Times by a Shein spokeswoman, the company believes "this lawsuit is without merit and we will vigorously defend ourselves."
Total Retail's Take: The suit is the latest challenge for Shein, which in November filed confidentially for an initial public offering (IPO) in the United States. Both Shein and Temu have become huge contenders in the U.S. market since Shein's American launch in 2019 and Temu's in 2022. Before Temu's expansion into the U.S. market, Shein dominated the cheap commerce space, selling clothes and lifestyle items at steeply discounted prices.