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Temu files lawsuit against SHEIN over ‘Mafia-style intimidation’

Temu files lawsuit against SHEIN over ‘Mafia-style intimidation’

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Chinese online marketplace Temu has accused online fast-fashion marketplace SHEIN of conducting “intensified” anti-competitive behaviour.

According to the lawsuit filed by Boston-based company WhaleCo on Wednesday, which operates in the US as Temu, SHEIN was accused of hatching a “desperate” plan by employing a "Mafia-style intimidation" to eliminate the competitive threat posed by Temu.

WhaleCo. claimed that SHEIN launched unlawful, anticompetitive exclusive-dealing agreements with coercive IP transfers from approximately 10,000 suppliers to SHEIN, without due consideration and, oftentimes, without their knowledge.

The court filing also said SHEIN has devised an anticompetitive scheme that misuses and abuses the Digital Millennium Copyright Act (DMCA) procedures and the U.S. Copyright Office registration regime to prevent ultra-fast-fashion suppliers from listing their products for sale on Temu. 

“SHEIN then relies on these unlawful IP seizures for thousands of DMCA notices seeking to shut down competing product listings by merchants who dare to list their products on Temu,” said the filing.

It outlined allegations about how Chinese suppliers who listed products on both platforms were summoned to SHEIN's offices in Guangzhou, falsely imprisoned, and forced to provide phone passwords and transaction records related to Temu.

Furthermore, the filling claimed that SHEIN had hired Temu’s key marketing and advertising personnel who had access to highly confidential information and know-how including for Temu’s trade dress that SHEIN copied. “With one of the recently poached employees, Temu found out that the employee had begun working at Shein before she departed from Temu,” the filing reads. 

"Shein’s persistent and increasingly aggressive use of anticompetitive conduct, coercion, and threatening behaviour necessitates this lawsuit," the filing added.

MARKETING-INTERACTIVE has reached out to both Temu and SHEIN for a statement.

In fact, this is not the first time Temu and SHEIN have filed lawsuits against each other in US courts. Both companies withdrew actions filed against one another in October without giving a reason.

Back in July, Temu filed a lawsuit in a Boston federal court, accusing SHEIN of violating US antitrust law in its dealings with clothing manufacturers. It filed to drop those charges in October. 

In October, SHEIN also dropped its lawsuit against Temu, suing Temu for trademark and copyright infringement, impersonating the SHEIN brand on social media, and collaborating with influencers to undermine SHEIN's business reputation.

Related articles:

Temu defends itself against allegations of sexualising children in ads 
SHEIN files US IPO in bid to expand global reach
Study: 12% of SHEIN customers would prefer to buy from Forever 21 amidst partnership

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