What does fast-fashion retailer Shein have in common with the Mafia? According to one lawsuit, organized crime.
Artists Krista Perry, Larissa Martinez, and Jay Baron all claim Shein cloned their work without permission to sell its own knockoff apparel, wall art, blankets, and pins.
The lawsuit further claims that “Shein has grown rich by committing individual infringements over and over again, as part of a long and continuous pattern of racketeering.”
If that’s true, Shein, valued at $66B, would be in violation of the United States’ Racketeer Influenced and Corrupt Organization (RICO) Act, passed in 1970 to take on organized crime.
What is racketeering?
Crimes committed in the course of business, which can mean everything from bribery to murder. Shein is not accused of murder, but it has been accused of:
- Harming the environment through overconsumption and pollution, like other fast-fashion retailers
- Unsafe working conditions, including allegations of forced labor
- Violating US tariff law
- Making clothes rife with unsafe chemicals, including lead
Key to this particular lawsuit, however, is copyright infringement — it accuses Shein of using its algorithms to determine fashion and decor trends, copying them, then churning out near-identical, cheaper versions.
An artist not included in the complaint previously accused Shein of selling $17 knockoffs of sweaters she hand-knitted and sold for $330.
Why go the RICO route?
Per The Wall Street Journal, at least 50 trademark or copyright infringement suits had been filed against Shein or its parent company, Zoetop Business Co., as of last July.
But attorney John Conway told Retail Dive that because Shein consists of several entities, many of which only exist for a short time, it’s hard to pinpoint which is “doing the copying.” Shein can — and has — blamed third-party designers and vendors.
The RICO complaint alleges it’s all one big — organized, if you will — scam, and how that’ll play out in court is sure to be interesting.
BTW: Shein recently tried to boost its reputation by offering influencers a tour of its factory in Guangzhou, China. It did not go over well.