Three US fashion designers have filed a lawsuit against China-based fast fashion retailer Shein for violating the Racketeer Influenced and Corrupt Organisations Act (RICO).
The designers, Krista Perry, Larissa Martinez and Jay Baron, filed the lawsuit in the United States District Court for the Central District of California Western Division.
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RICO is a law created to prosecute organised crime.
The clothing retailer allegedly produced, distributed and sold exact copies of copyrightable designs by the fashion designers.
According to the designers, the brand steals independent artists’ works “over and over again, as part of a long and continuous pattern of racketeering” and using artificial intelligence (AI).
The complaint in the court filing said: “Shein has grown rich by committing individual infringements over and over again, as part of a long and continuous pattern of racketeering, which shows no sign of abating.
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By GlobalData“There is no indication that Shein intends to slow down any time soon—and indeed their corporate literature speaks only of projected exponential growth. It is not an exaggeration to suggest that Shein’s pattern of misconduct involves commission of new copyright and trademark infringements every day.”
Shein, which recently raised capital at a staggering $100bn (770bn yuan) valuation, is said to sell more clothing than any other in the world.
The brand’s business model depends on collecting customer data, which it then reverse-engineers into fashion trends.
The complaint further added: “Shein is actually a greater societal threat than TikTok—because it contributes mightily to serious problems beyond data security and privacy such as environmental damage, sweatshop (or worse) labour conditions, tax avoidance, child safety, as well as the subject of this lawsuit, large-scale and systematic intellectual property theft from US designers large and small.”
Last month, Shein refuted Reuters‘ report that said it had confidentially registered with US Securities and Exchange Commission for an initial public offering in New York.
