OOnline fast-fashion giant Shein is suing its rival Temu for copyright infringement – the latest update in the ongoing dispute between the two China-linked marketplaces.
Shein – which was founded in China but is now based in Singapore – claims in a lawsuit filed on Monday that Temu, owned by PDD Holdings, stole its designs, posed as Shein on X (formerly Twitter) and incorporated Shein trademarks into their designs, which they called a “coordinated scheme.” Shein had already sued Temu in 2023 for intimidating and misleading customers.
“Temu purports to be a legitimate e-commerce marketplace where independent sellers can list their products for sale,” wrote lawyers for Shein’s parent company Roadget Business in their lawsuit against Temu’s operators, filed Monday in the U.S. District Court for the District of Columbia. “But the facts uncovered so far – and those expected to be uncovered during the discovery process – prove otherwise.”
In a prepared statement obtained by CNBC, a Temu spokesperson responded to the lawsuit by saying Shein’s “audacity is unbelievable” and that the company “has the audacity to fabricate allegations against others for the very wrongdoing for which it is repeatedly sued.”
TIME has asked Temu for comment on the lawsuit.
Both Temu and Shein are among the fastest-growing companies in the U.S. They ship nearly a million packages a day to American consumers, frequently top the Apple App Store, and generate billions of dollars in revenue each year. Both companies typically ship packages directly from Chinese warehouses, allowing American consumers to purchase fast fashion, electronics, and other products at incredibly low prices.
This is not the first lawsuit accusing Temu of this type of copyright infringement. Earlier this year, dozens of small business owners filed suit against Temu alleging that their designs appeared on Temu without their consent.
But while Shein is playing these allegations against Temu, the company is also facing allegations of its own. Last year, three independent designers sued Shein for selling “exact copies” of their work. These allegations are similar to the recent lawsuit they filed against Temu.
This isn’t the first foray into the legal world between the two rivals either. In 2023, Shein accused Temu of misleading consumers and using deceptive business practices and deceiving consumers by creating imposter accounts on social media. Temu then filed suit against Shein in Massachusetts, accusing them of violating U.S. antitrust laws by allegedly preventing developers and manufacturers from working with Temu and punishing those who did so.
Both companies’ lawsuits were dropped in October, but Shein filed another lawsuit against Temu in December, this time accusing him of “mafia-style intimidation.”
Earlier this year, Temu made headlines with numerous Super Bowl commercials. Several spots during the game touted its temptingly low prices and encouraged customers to “shop like a billionaire.”
Read more: The truth about Temu, the most downloaded new app in America
Despite boasting about these cheap consumer goods, Temu’s Better Business Profile shows a total of 2,704 complaints over the past three years. The two companies have also been criticized for their labor practices and ties to the Chinese government.
The success and subsequent complaints of small business owners Shein and Temu caught the attention of lawmakers. Several members of Congress prepared a bill to reduce the trade advantages enjoyed by Temu and Shein. This is a trade rule called “de minimis,” which allows the companies to send packages without paying duties and certain taxes as long as the value of the shipments is under $800.
Shein’s current lawsuit argues that Temu was “armed with stolen information” and directed its sellers to copy Shein’s best-selling products and sell counterfeit versions on Temu’s website and mobile application.
