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Temu sues Shein, alleging ‘Mafia-style’ intimidation of manufacturers

Temu sues Shein, alleging ‘Mafia-style’ intimidation of manufacturers

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This week’s lawsuit is the latest legal clash between the two ultra-cheap online retailers.

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Image: The Verge

Online shopping giant Temu is suing its competitor Shein, saying the fast fashion giant is using “Mafia-style” intimidation tactics on merchants.

In the suit filed on Wednesday, Temu says Shein has deployed increasingly aggressive strategies to “illegally interfere with Temu’s business,” including intimidating merchants who list their products on both platforms and issuing tens of thousands of illegitimate copyright takedowns.

Temu and Shein have previously sued each other

“Shein recently has gone so far as to falsely imprison merchants doing business with Temu, including detaining merchant representatives in Shein’s offices for many hours while Shein confiscates the merchants’ electronic devices, obtains access to proprietary Temu information through the merchants’ seller accounts, and threatens the merchants with penalties for doing business with Temu,” the suit claims. Shein didn’t immediately respond to a request for comment.

This isn’t the first instance of the two companies clashing in court. The two companies have previously brought suits against one another, as Bloomberg notes, including an earlier case this year in which Temu accused Shein of bullying manufacturers to try to stop them from working with the marketplace. In another case, Shein accused Temu of instructing influencers to make “false and deceptive statements” against Shein while promoting Temu. Both suits were dropped in October.

The suit filed this week offers a rare look into the business dealings of Temu, the sprawling online superstore with bargain-bin prices that is growing rapidly in the US. For example, the suit says that more than 100,000 images are uploaded to Temu.com each day and that it receives, on average, 170 copyright takedown requests daily — 63 percent coming from Shein.

The lawsuit comes as Shein prepares to go public in the US, which could happen in 2024. But for years, the company has been embroiled in controversies around its labor practices, supply chain, and pattern of selling copies of items by small businesses. Shein has tried to fend off some of the criticism: in 2022, it said it would spend $15 million improving standards at factories after a report found that workers were subject to illegally long hours and withheld wages. Shein has also staged several in-person events across the US, an attempt to pull back the curtain and interact directly with shoppers (one such New York event left me with a lot of questions).

Read the full suit below: