Deep Dives
Shein is preparing to go public, confidentially lodging a pre-IPO application with the U.K.’s Financial Conduct Authority earlier this month with the aim of floating on the London Stock Exchange. The China-founded, Singapore-based ultra-fast fashion titan has been garnering headlines over the past year in connection with its reported ambitions to list on a public exchange, initially in the United States and more recently, in London after facing pushback from stateside lawmakers who reportedly raised questions/concerns about Shein’s murky supply chain (including potential ties to forced labor), alleged avoidance of U.S. import taxes and Customs’ oversight, and infringement of others’ copyrights and trademarks, among other widely-reported issues.
Ahead of a potential listing in London later this year, one that would reportedly see it offer up shares valued at roughly $63 billion, we took an updated dive into the state of Shein’s legal dealings (you can find our earlier review here).
In particular, we looked at the complaints waged against Shein and its subsidiaries/related entities, including Shein Distribution Corp., Shein US Services, Shein Fashion Group, Inc., Zoetop Business Co., and Roadget Business PTE, among others (collectively, “Shein”) in federal courts in the U.S. in order to get a handle on what the legal landscape looks like for the company that has nabbed the title of “the largest and fastest-growing apparel company in the world.”
When reviewing Shein-specific court documents filed between January 2020 and June 2024, we found the following …
> Shein has been on the receiving end of new lawsuits since the beginning of 2020 when the first wave of litigation was initiated against the company in federal courts in the U.S. By our count, Shein is currently facing upwards of 40 ongoing cases. (Cases that have been consolidated are counted individually.)
> The bulk of such litigation waged against Shein comes in the form of intellectual property cases, with plaintiffs primarily alleging that Shein engaged in copyright, trademark, and/or patent infringement. On the topic of infringement, Shein’s spokesperson said that the company “takes all claims of infringement seriously,” and that “it is not our intent to infringe anyone’s valid intellectual property and it is not our business model to do so.”
In a small number of cases, different and/or additional causes of actions have been alleged against Shein, including …
(1) The Americans with Disabilities Act. Plaintiff Mary Conner filed an ADA-focused complaint against Shein over the accessibility of its e-commerce site in June 2020. Conner alleged that Shein failed to “design, construct, maintain, and operate their website to be fully accessible to and independently usable by [her] and other blind or visually impaired persons.” She voluntarily dismissed the suit in July 2020;
(2) The Sherman Act, the Clayton Act, and the Massachusetts Consumer Protection Law. These claims stem from a since-settled case that Chinese retailer/e-commerce company Temu filed against Shein in July 2023. (For some additional context, Shein sued Temu in March 2023 for allegedly infringing Shein’s “exclusive and valuable trademark and copyright rights,” and attempting to boost its own growth in the American market by “impersonating [the] SHEIN brand on social media, trading off of the well-known SHEIN trademarks, and using copyrighted images owned by [Shein] as part of [its own] product listings.”);
(3) Restraint of trade, monopolization, attempted monopolization, unfair competition, and tortious interference. On the heels of settling rival lawsuits with Shein, Temu waged a new suit in December 2023, alleging that its rival has engaged in a “mafia-style” scheme to intimidate suppliers and abuse the U.S. legal system in order to “illegally interfere with Temu’s business.”
(4) The Racketeer Influenced and Corrupt Organizations Act. A RICO charge was waged against Shein by way of the lawsuit that independent designers Krista Perry, Larissa Martinez, and Jay Baron filed against it in July 2023, accusing the company of engaging in a copyright and trademark infringement scheme that also amounts to racketeering due to the company’s allegedly “confusing” and “decentralized” corporate structure;
(5) Telephone Consumer Protection Act. Plaintiff Amanda Ramirez filed suit against Shein in May 2024, alleging that the company “engages in unsolicited text messaging and continues to text message consumers after they have opted out of [its solicitations,” thereby, violating the Telephone Consumer Protection Act; and
(6) Fraud, and violations of the New Jersey Consumer Fraud Act and California Unfair Competition Law. Plaintiff Devon Wallman filed a since-settled suit against Shein for allegedly failing “to safeguard the account and credit card information of customers to [Shein-owned] Romwe.com” after it was targeted in a cyberattack.
> The lawsuits that have been/continue to be waged against Shein in the United States are primarily being filed in federal courts in California, Florida, and New York.
> Among some of the most well-known plaintiffs to wage infringement suits against Shein are Nirvana’s holding company, Dr. Martens owner Airwair International, Dolls Kill, Chrome Hearts, eyewear-maker Oakley, Ralph Lauren’s PRL USA Holdings, Stussy, and jewelry brand Alison Lou.
> On average, the lawsuits waged against Shein last for roughly 6.7 months. Save for a number of outliers, the cases are commonly being voluntarily dismissed by the plaintiffs as a result of settlements between the parties.
One Shein lawsuit worth keeping a close eye on is the case that artist Alan Giana filed against it in a New York federal court on April 5, in which he accuses Shein of carrying out an “industrial-scale scheme of systematic, digital copyright infringement,” which largely depends on the use of artificial intelligence. The case is particularly interesting and worthy of attention in light of the increasing rate of adoption of AI models in fashion, including by companies that are angling to analyze market data in real time in order to identify trends, and to design and manufacture products more quickly.