Shein Faces Fresh Copyright Infringement Allegations Amid Rapid Production Model
Apr/22/2024
Shein, the fast-fashion giant, is embroiled in another legal battle as detailed in a lawsuit filed last Friday in the U.S. District Court for the Southern District of New York. The complaint alleges that Shein's business model, which produces thousands of new items daily via an algorithm-based design system, operates without sufficient oversight to ensure the designs do not infringe on existing copyrights. This system reportedly scans social media and competitor activities to replicate trending designs. Notably, Shein has faced numerous lawsuits from both independent designers and major brands like Victoria’s Secret, Uniqlo, and H&M, accusing it of copyright violations. Furthermore, Shein's practices have attracted scrutiny from U.S. lawmakers, with concerns about compliance with the Uyghur Forced Labor Prevention Act and potential links to forced labor, leading to calls for a halt to its planned IPO. Meanwhile, Shein’s competitor, Temu, has not only sued Shein for anticompetitive practices but is also contending with lawsuits alleging serious security breaches in its operations. Chart below shows online retailers from which global shoppers made their most recent cross-border purchase in 2023 (in %).
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