Fashion e-commerce giant Shein has been accused of copyright infringement in a class action lawsuit that alleges the company uses data mining and electronic monitoring to identify popular models and steals them to create its products.
IN complaint In U.S. District Court for the Southern District of New York on April 5, plaintiff and artist Alan Giana accused Shein of using its electronic monitoring system and artificial intelligence to track what consumers watch online, primarily through Instagram and TikTok, to identify trends and designs. , which he expects will be popular. The complaint alleges that electronic monitoring will particularly penalize artists who post their projects online in search of exposure: if an artist’s post receives more online attention from users, it becomes a greater target for Shane’s data collection for the purpose of co-opting and mass-producing projects. .
“Shein does not manufacture many of its products; it certainly does not develop thousands of projects per day,” the complaint states. “Instead, it uses sophisticated electronic systems that algorithmically scan the Internet for popular works created by artists like Mr. Jana.”
Founded by a Chinese billionaire. Sky Xu in 2008, Shane is able to produce goods in a matter of days, selling them on an online marketplace that has 600,000 products listed at once, placing them at the pinnacle of fast fashion.
But this isn’t the first time Shane has faced allegations of copyright infringement. The company suffered from dozens of lawsuits alleging theft. In July 2023, three graphic designers in China. sued Shein for copyright infringement, saying the company used “secret algorithms” to identify trends that required copying artists’ work to work. The complaint stated that the company’s history of copyright infringement was so severe that it constituted a racketeeringor coordinated money-making efforts, often targeting organized crime only. A few months later, in December, Temu’s competitor sued Shein for “mafia intimidation of suppliers“allegedly false arrest of traders and stealing business secrets.
“This is incredibly sophisticated and terribly brazen,” said Internet and intellectual property lawyer Brett Lewis of Lewis & Lin LLC. Luck. “And it’s kind of shocking that they got away with it.”
Along with the rampant production associated with concerns about environmental instability and forced laborShein’s practice allowed her to sell products much cheaper than her competitors, including 50% less than H&M— and grow astronomically in just a few years. A private company probably brought over 30 billion dollars revenue in 2023 compared to $23 billion year before
Shein did not respond to Luckrequest for comment, but has answered to previous allegations of copyright infringement: “SHEIN takes all allegations of copyright infringement seriously and takes prompt action when complaints are filed by actual intellectual property rights holders. We will vigorously defend against this lawsuit and any unfounded claims.”
Benefits of a Class Action
Lewis compared Shane’s alleged intellectual property practices to the counterfeit Coach and Gucci products sold on city streets, except that the use of artificial intelligence algorithms and data collection have increased the scope of the practice exponentially.
“Shane’s business model is that if we get sued, we’ll pay, but if not, we just keep doing it because it’s so profitable,” he said.
If Shane does infringe on artists’ intellectual property, the practice is especially harmful to small creators genuinely trying to promote only themselves, since many may not even realize that Shane is allegedly using their data or work, Lewis said. The lawsuit represents thousands of people who were potentially harmed. Shane’s influence may have allowed the sheer number of artists to take advantage of, but if the class action goes in favor of the creators, it has the potential to make a real difference, not only setting a precedent, but also compensating those who were harmed.
“Many times [in] class action lawsuits, those injured get a $5 coupon to Outback Steakhouse or something like that; you don’t really get much relief,” Lewis said. “In this case, one would hope that there would be significant relief.”
Philippa Loengard, director of the Kernochan Center for Law, Media and the Arts at Columbia Law School: told Financial Times that past settlements offer hope to artists seeking justice. While Shein won’t reveal the details of his calculations, the payouts “tend to be generous for artists.” It might be more profitable than a licensing agreement.”