Aimee Picchi of CBS News is reporting that Shein is facing a RICO lawsuit.
A lawsuit has been filed against Shein, a popular Chinese fast-fashion retailer, by three designers who claim their original designs were "truly exact copies" and sold on the platform without permission. The lawsuit alleges that Shein engages in "egregious" copyright infringement and that this practice is part of a continuous pattern of racketeering to produce thousands of new items daily for its customers. The suit accuses Shein of violating the Racketeer Influenced and Corrupt Organizations Act (RICO). Shein is the world's largest fashion retailer with annual sales of nearly $30 billion.
The lawsuit is not the only trouble Shein has faced; previously, lawmakers requested the Securities and Exchange Commission to halt its initial public offering until verifying that the company does not use forced labor from the Uyghur population. The article also mentions accusations of other labor violations related to sweatshops and wage theft in China.
One of the designers involved in the lawsuit describes Shein's response to copyright infringement complaints as dismissive, offering just $500 for copied work. The decentralized structure of Shein makes it challenging to pursue legal action, prompting the designers to allege a RICO Act violation to address misconduct within a larger enterprise.
The Racketeer Influenced and Corrupt Organizations Act was originally designed to combat organized crime but has also been used in cases of white-collar crimes. The lawsuit argues that Shein's copyright infringement constitutes racketeering.
The article mentions that there is little known about Shein's founder, Chris Xu, also known as Xu Yangtian, who is valued at over $10 billion. The company's mysterious leadership adds complexity to the legal situation.
Finally, it is noted that a Congressional report criticized Shein and another Chinese retailer, Temu, as part of an investigation into products potentially made with forced labor in China. Shein claimed to comply with customs and import laws and have zero tolerance for forced labor.
(The article was written with assistance from ChatGPT)
Source: CBS News
Shein is one of the most notorious fast fashion houses and major industry polluter. In addition to these lawsuits, Shein's fast fashion practices have come under fire from an enviormental viewpoint as fast fashion itself contribute to the 8-10% of greenhouse gas emissions responsible from the fashion industry.
In a recent article by Time, a report called "Synthetics Anonymous 2.0" on fashion sustainability illustrates Shein's excessive utilization of virgin polyester and significant oil consumption. This results in carbon dioxide emissions equivalent to approximately 180 coal-fired power plants. Consequently, the company emits approximately 6.3 million tons of carbon dioxide annually, a figure that falls considerably short of the 45% target set to reduce global carbon emissions by 2030.