Fast-fashion retailer Temu sues rival Shein over US antitrust law

By Mike Scarcella

(Reuters) – Chinese e-retailer Temu has filed a new lawsuit accusing rival Shein of violating U.S. antitrust law in its dealings with clothing manufacturers, escalating a legal clash for dominance in the fast-fashion market.

Temu, represented by prominent U.S. law firm Boies Schiller Flexner, filed the new case on Friday in Boston federal court.

The two companies are already embroiled in litigation in Chicago federal court, where Shein has alleged Temu worked with influencers to disparage Shein on social media. Temu’s bid to dismiss that case is pending.

Temu’s new lawsuit alleges that Shein, which entered the U.S. market in 2017 and has a $66 billion valuation, has abused its market power in trying to coerce manufacturers to shun Temu.

Temu’s complaint alleged Shein “forces manufacturers to sign loyalty oaths certifying that they will not do business with Temu.”

Shein’s business practices have led to higher prices and fewer choice for consumers, Temu said. Shein has also impeded “the expansion of the ultrafast fashion market in the United States,” the lawsuit asserts.

A spokesperson for Shein on Monday said Temu’s lawsuit was “without merit and we will vigorously defend ourselves.”

The case is the latest development in a feud between the fast-fashion competitors.

Temu’s new antitrust case adds to Shein’s legal pressures. A group of designers sued the company in Los Angeles federal court last week, alleging “systemic and repeated” copyright infringement. Shein said in a statement reported by media organizations that it would defend itself.

Shein, founded in China, markets apparel for low prices, including shoes sold for less than $20 and dresses priced at $10. The company produces clothing in China that is sold online in the U.S., Europe and Asia.

Temu markets itself as offering lower prices than Shein. Data firm YipitData said Temu’s gross merchandise value rose from $3 million in September to $192 million in January.

Temu’s Boies Schiller attorneys did not immediately respond to a request for comment on Monday.

The lawsuit, assigned to U.S. District Judge Denise Casper, seeks unspecified triple damages.

The case is Whaleco Inc v Shein US Services LLC et al, U.S. District Court for the District of Massachusetts, No. 1:23-cv-11596.

For plaintiff: Philip Korologos and James Denvir of Boies Schiller Flexner

For defendant: No appearance yet

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