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A group of designers has initiated a lawsuit against Shein, the Chinese fast-fashion giant with an estimated value of $66 billion.
They have accused the company of repeatedly stealing independent artists’ creations, constituting a long-standing pattern of racketeering.
Designers Krista Perry, Larissa Martinez, and Jay Baron assert in their legal action that Shein’s design “algorithm” relies on generating exact AI copies that can significantly harm the careers of independent designers.
They further allege that Shein’s advanced artificial intelligence is capable of appropriating the pieces with the highest commercial potential.
Although the lawsuit emphasizes on Shein’s utilization of artificial intelligence, the precise manner in which AI is employed in the company’s design process remains unclear. It appears that Shein does not employ AI to directly generate the alleged copies.
The lawsuit claims that Shein’s practices violate the Racketeer Influenced and Corrupt Organizations Act (RICO), a law initially enacted in 1970 to combat organized crime, specifically targeting the American Mafia.
The designers, seeking a jury trial, argue in their lawsuit that the misconduct of the fast-fashion behemoth is not attributable to a single entity but rather to a de facto association of entities.
They assert that RICO is applicable in this case because it was designed to address the wrongdoings of culpable individuals operating within larger enterprises.
When contacted for comment, Shein provided TechCrunch with a generic response, expressing its serious consideration of such allegations and vowing to vigorously defend itself.
Shein, one of the world’s fastest-growing online retailers, has faced previous accusations of mistreating artists, workers, and the environment.
The company has admitted to breaching local labor laws in the past. Despite these troubling reports, Shein has made efforts to portray itself as an environmentally conscious and socially responsible firm.
However, a recent influencer campaign intended to bolster its image was encountered with swift backlash.