Shein, Valued at $66 Billion, Faces Lawsuit by Designers for Alleged Art Theft and Racketeering

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A group of designers consisting of Krista Perry, Larissa Martinez, and Jay Baron are taking legal action against Shein, a Chinese fast-fashion company that is estimated to be valued at $66 billion. The designers allege that Shein has repeatedly stolen their original works as part of an ongoing pattern of racketeering. They claim that Shein’s design algorithm relies on generating exact copies of independent artists’ designs, which can severely harm the artists’ careers. The lawsuit suggests that Shein’s artificial intelligence technology is capable of appropriating pieces with high commercial potential.

Although the lawsuit highlights the use of artificial intelligence by Shein, it remains unclear how exactly the company employs AI in its design process. It is evident that Shein does not utilize AI to directly generate the alleged copies. To support their claims, the designers have included side-by-side comparisons in their lawsuit.

The designers argue that Shein’s practices violate the Racketeer Influenced and Corrupt Organizations Act (RICO), a law enacted in 1970 initially targeting organized crime syndicates such as the American Mafia. Seeking a jury trial, they contend that Shein’s misconduct involves not just a single entity but a de-facto association of entities. By invoking RICO, they aim to address the culpability of individuals within a larger enterprise.

When approached for comment, Shein provided TechCrunch with a standard response stating their commitment to taking such claims seriously and asserting their intention to vigorously defend themselves against these allegations.

Shein has gained substantial growth as one of the rapidly expanding online retailers globally; however, it has faced numerous accusations regarding mistreatment of artists, workers, and environmental negligence. In previous instances, the company has admitted to violating local labor laws. Despite this unfavorable reputation, Shein has attempted to portray itself as an environmentally conscious and socially responsible firm. Recently, it launched a campaign targeting influencers; however, this effort received negative backlash.