Why Shein Is Suing Temu—Again

Online fast-fashion giant Shein is suing their rival Temu over copyright infringements— the newest update in the ongoing feud between the two Chinese-linked marketplaces.

Shein—which was founded in China but is now based in Singapore—is alleging in a suit filed on Monday that Temu, owned by PDD Holdings, stole their designs, posed as Shein on X—formerly Twitter—and embedded Shein trademarks in their designs in what they call a “coordinated scheme.” Shein previously sued Temu in 2023 for intimidation and misleading customers.

“Temu masquerades as a legitimate e-commerce ‘marketplace’ where independent sellers can offer their products for sale,” attorneys for Shein parent company Roadget Business wrote in their lawsuit filed against Temu operators in the U.S. District Court for the District of Columbia on Monday. “But the facts uncovered to date—and those expected to be uncovered in discovery—demonstrate otherwise.”

In a prepared statement shared with CNBC, a Temu spokesperson responded to the suit by saying Shein’s  “audacity is unbelievable” and that the company “has the nerve to fabricate accusations against others for the very misconduct they’re repeatedly sued for.”

TIME reached out to Temu for comment regarding the lawsuit.

Both Temu and Shein are among the fastest growing companies that do business in the U.S., sending almost a million packages a day to American consumers, frequently topping the Apple App Store, and racking up billions of dollars of revenue every year. Both companies typically ship packages straight from Chinese warehouses, allowing American consumers to buy fast fashion, electronics and other products for incredibly low prices.

This is not the first lawsuit Temu has been accused of this sort of infringement. Earlier this year, dozens of small business owners filed complaints against Temu, who said their designs have popped up on Temu without their consent.

Yet, as Shein leverages these allegations onto Temu, they also field accusations of their own. Last year, three independent designers sued Shein for selling “exact copies” of their work, similar accusations to the recent suit they filed against Temu. 

This is also not the first foray into the legal world between the two rivals. In 2023, Shein accused Temu of misleading consumers and deceptive business practices and misleading consumers by creating impostor accounts on social media. Temu then filed suit against Shein in Massachusetts, accusing them of violating U.S. antitrust laws by allegedly preventing creators and manufacturers from working with Temu and punishing those who did. 

Both  suits by the companies were dropped in October, but Shein filed another suit once again against Temu in December, this time alleging  “mafia-style intimidation.”

Earlier this year, Temu garnered attention after their multiple Super Bowl ads, which flaunted their alluringly low prices in multiple ad spots during the game, encouraged  customers to “shop like a billionaire.”

Read More: The Truth About Temu, the Most Downloaded New App in America

Though they boast these cheap consumer goods, Temu’s Better Business Profile shows 2,704 total complaints in the last 3 years. The two companies have also been criticized for their labor practices and connections to the Chinese government.

The success and subsequent complaints by small business owners of Shein and Temu have caught the attention of legislators, with several Congresspeople drafting legislation that aims to reduce the trading advantages Temu and Shein have: a trade rule known as de minimis, which allows the companies to ship packages without paying duty and certain taxes as long as shipments are under the value of $800. 

In Shein’s current suit, they argue that Temu is “armed with stolen information” and directed its sellers to copy Shein’s best-selling Shein products and sell knock-off versions on Temu's website and mobile application.