The competition between discount shopping apps Temu and Shein is increasingly playing out in the courts. In its latest salvo, Temu has accused Shein of anticompetitive practices in a lawsuit filed in a Massachusetts District Court on July 14.
Temu alleges that Shein has “engaged in a campaign of threats, intimidation, false assertions of infringement, attempts to impose baseless punitive fines and has forced exclusive dealing arrangements” with the clothing manufacturers that both apps rely on for their ultra-fast fashion offerings.
“As the dominant ultra-fast fashion retailer, Shein knows that manufacturers need Shein’s volume and its access to the U.S. market and it is, therefore, able to coerce manufacturers into arrangements that force manufacturers not to do business with Temu,” alleges the lawsuit. “The intent and effect of Shein’s anticompetitive conduct is to exclude Temu so that Shein can charge higher prices to consumers while offering a smaller selection and lower quality than Shein would if it faced competition from Temu.”
A spokesperson for Shein told Reuters that Temu’s lawsuit was “without merit and we will vigorously defend ourselves.”
The new lawsuit is only the latest in a series of legal incidents involving both companies. Both apps have come under intense scrutiny from the House Select Committee investigating “the threat posed by the Chinese Communist Party,” with a new report claiming that the companies exploit trade loopholes to avoid being subjected to human rights reviews and paying import duties.
Last week Shein also found itself the subject of a new RICO lawsuit from three graphic designers accusing the company of copyright infringement and racketeering. And a lawsuit brought by Shein against Temu earlier this year is still ongoing, in which Shein accuses Temu of contracting influencers to make “false and deceptive claims” about Shein.