Fast-fashion giant Shein hit with a RICO lawsuit

If serious allegations were clothes, Shein would have more than enough by now to do its very own haul video.

The latest comes by way of a lawsuit filed this week by a group of independent designers, who allege Shein used sophisticated tech to steal and sell exact replicas of their original designs, and consistently does the same to others.

🤖📈 How it (allegedly) works… The plaintiffs are arguing Shein’s fast-fashion strategy – small initial production runs of 100-200 items, then scaling up to meet demand – allows the company to make billions off stolen IP while simultaneously testing the copyright infringement waters.

• If Shein doesn’t receive a lawsuit after a stolen design gets posted and initial products created – a common occurrence when it comes to small sellers without brand protection measures in place – it continues selling the item.
• If a lawsuit does come – a common occurrence when designs are taken from retail giants like Nike – Shein allegedly removes the listed item and blames its posting on a separate company… that Shein also owns.

📝 You might just get hit with that RICO. Per the lawsuit, Shein uses a “byzantine shell game of corporate structure” that makes it difficult to figure out which party to sue. In response, the plaintiffs are citing the Racketeer Influenced and Corrupt Organizations Act, or RICO, in order to target all of Shein’s corporate parties and subsidiaries in one fell swoop – the same legal tool US authorities first used in 1970 to target the mafia. Shein has declined to comment.