What's everyone on about?
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What's going on with SHEIN possibly being a criminal racket? (self.OutOfTheLoop)
submitted 3d ago by TheSameAsDying
There are news stories going around about the fashion retailer SHEIN being under a RICO (racketeering-influenced corrupt organizations) investigation. As far as I know RICO cases only ever get brought up against the literal mafia. So, um, what's going on here?
www.cbsnews.com/amp/news/shein-lawsuit-rico-violations/
www.cbsnews.com/amp/news/shein-lawsuit-rico-violations/
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absolutedestiny 1883 points 3d ago
Answer: Shein is structured as a lot of different companies that supply each other in the production of their sweatshop cheap labor fast fashion. The company has in the past received a number of legitimate accusations of stolen designs.
The lawsuit is an escalation by designers who have had their work stolen by Shein but could not directly sue Shein because the company that actually stole the design was one of several in a chain of companies before the garment was finally sold by Shein.
The lawsuit uses RICO to claim that these ancillary companies are still effectively Shein and much like low level mobsters working ultimately for their big bosses, the big bosses at Shein are ultimately liable for the crimes committed by these ancillary companies.
The lawsuit is an escalation by designers who have had their work stolen by Shein but could not directly sue Shein because the company that actually stole the design was one of several in a chain of companies before the garment was finally sold by Shein.
The lawsuit uses RICO to claim that these ancillary companies are still effectively Shein and much like low level mobsters working ultimately for their big bosses, the big bosses at Shein are ultimately liable for the crimes committed by these ancillary companies.
jeanleonino 521 points 3d ago
This one is closer, and there are other two dimensions to the lawsuit:
* The opening point: that the data they are acquiring is a threat to society and making it should be a similar case to TikTok (but to be fair SHEIN did not try to sway political opinions)
* And accusing of "Uber-like" activities from SHEIN saying they can't control the intelectual property thefts and similar issues because they are just a marketplace, but it is clear they do have the influence and push products forward.
The full document is here, it's an easy read: https://storage.courtlistener.com/recap/gov.uscourts.cacd.891125/gov.uscourts.cacd.891125.1.0_2.pdf
* The opening point: that the data they are acquiring is a threat to society and making it should be a similar case to TikTok (but to be fair SHEIN did not try to sway political opinions)
* And accusing of "Uber-like" activities from SHEIN saying they can't control the intelectual property thefts and similar issues because they are just a marketplace, but it is clear they do have the influence and push products forward.
The full document is here, it's an easy read: https://storage.courtlistener.com/recap/gov.uscourts.cacd.891125/gov.uscourts.cacd.891125.1.0_2.pdf
ElectronicShredder 58 points 3d ago
>but to be fair SHEIN did not try to sway political opinions
Yeah, not believing that after my sister's rant about Shein's XL being "smaller than M"
Yeah, not believing that after my sister's rant about Shein's XL being "smaller than M"
Fortune424 209 points 3d ago
Asian brands usually fit smaller than Western ones.
Admirable-Influence5 49 points 3d ago
Addendum: Way smaller! And nothing in the descriptions usually states such.
WilsonPB 133 points 3d ago
In many parts of the world, an XL is smaller than a US M.
guaranic 11 points 2d ago
US M also went up in size, I think. I always used to wear a Large growing up, but now Larges are tents.
[deleted] -1 points 2d ago
[deleted]
AstarteHilzarie 62 points 3d ago
What does sizing differences have to do with political opinions?
jaymac1337 28 points 2d ago
They mislabelled the issue of female body shaming as political when it's social
Pale-Bandicoot7652 39 points 2d ago
SHEIN is very good about listing both body and garment measurements. They also post all the reviews, even the negative ones. Like all on line purchases the buyer needs to fully read about the product
Ophelia_Y2K 6 points 2d ago
actually i’ve noticed the measurements (which often sound very small for the smallest sizes at least, idk personally about larger sizes) only fit if they are actually smaller than your own measurements, because the clothes tend to be very stretchy and are measured pre-being stretched by your body how they are actually worn. so despite the measurements listed being smaller than in the west (say a size 0 being listed as like a 22 inch waist instead of 24), i often find that they actually fit looser somehow
Skyblacker 1 points 2d ago
It's a math problem: model's measurements / sample size measurements = my measurements / X size measurements
And I don't have to calculate everything. As a white woman buying from a Chinese retailer, it's enough to check whether it fits the bust and hips. Maybe inseam.
And I don't have to calculate everything. As a white woman buying from a Chinese retailer, it's enough to check whether it fits the bust and hips. Maybe inseam.
Heavyweighsthecrown 3 points 2d ago
Shein sells clothing all around the world - who all have different sizings for S/M/XL etc by the way - not just to fat americans
myassholealt 50 points 3d ago
To be fair, the average American is overweight.
panlakes 75 points 3d ago
And the average Asian is smaller than an average not overweight American
chupathingy99 9 points 2d ago
Can confirm, am fat.
Admirable-Influence5 -19 points 2d ago
So. . .Sounds like Americans should *not* be buying any of their clothing products. 'Too bad "overweight" Americans. We'll just keep sending you out those XLs that wouldn't even fit an average American 10 YO and the shame is on you for being "overweight" and not on us for not properly noting to our "valued" customers that our clothing are sized for a proportionately smaller clientele.'
ThisIsSoIrrelevant 9 points 2d ago
Listening to my sister talk about SHEIN I am pretty sure it is a cult.
hillsfar 18 points 2d ago
U.S. vanity sizing is through the roof, as over 40% of Americans are obese, and of the remaining less than 60%, many are getting there.
gopher_space 8 points 2d ago
> U.S. vanity sizing is through the roof
My grandmother's first job was replacing size labels on department store dresses to whatever size the customer thought they were. This isn't a new phenomenon.
My grandmother's first job was replacing size labels on department store dresses to whatever size the customer thought they were. This isn't a new phenomenon.
ChickenOatmeal 11 points 2d ago
How the fuck could you possibly consider garments having irregular sizes political.
Skyblacker 0 points 2d ago
See r/fatlogic , lol.
ChaoticxSerenity 1 points 2d ago
julianmas 2 points 1d ago
You’ve hit the nail on the head, but there are two sides. SHEIN exploits workers and steals designs, and some well-known brands are frightened that SHEIN might monopolize the market for cheap clothes for the masses. It’s not elite clothing; its niche is inexpensive clothing for people who don’t buy ARMANI, etc.
jeanleonino 1 points 1d ago
Oh yeah, that's a really important inside. I'm from Brazil and rapidly they became the biggest seller by volume in Brazil even triggering some internal issues because sellers on SheIn pretend to be individuals, but are companies. Individuals selling online up to 50 USD do not need to pay taxes and SHEIN was using that loophole
noSoRandomGuy 3 points 2d ago
> And accusing of "Uber-like" activities from SHEIN saying they can't control the intelectual property thefts and similar issues because they are just a marketplace, but it is clear they do have the influence and push products forward.
Section 230 and these types of laws are now long in the tooth. Youtube, Reddit and other need to be treated as publishers since they have strategies to actively push content rather than the passive involvement that the laws like 230 envisioned.
Section 230 and these types of laws are now long in the tooth. Youtube, Reddit and other need to be treated as publishers since they have strategies to actively push content rather than the passive involvement that the laws like 230 envisioned.
lunk 35 points 2d ago
If america REALLY cared about it's working class, they would be using this same set of laws to prove that the ultra-rich are hiding their wealth using shell companies, and paying ZERO taxes.
Let's see how long that takes to happen.
Let's see how long that takes to happen.
OlympiaImperial 6 points 2d ago
As a designer myself, fast fashion is a blight on humanity and the environment
mulberrybushes -2 points 2d ago
Since when does RICO work against China?
butterdrinker -35 points 3d ago
Can you really sue for a 'stolen design'?
I mean I'm sure you can't sell a fake clothings that carries a fake label, but you can't 'own' a clothing's design.
I mean I'm sure you can't sell a fake clothings that carries a fake label, but you can't 'own' a clothing's design.
absolutedestiny 35 points 3d ago
There's plenty of ways. One simple one is I draw a cute bunny, post it on my blog, I then find it on a Shein sweater. That's my art, my copyright but Shein claims someone else did the infringement. The mob boss didn't sell the cocaine, this other guy he doesn't know personally did. That's where the RICO part comes in.
omgcatss 9 points 3d ago
Usually where these companies get into trouble is with graphical elements, like the graphic design on a t-shirt or the print on a fabric.
Generally speaking the shape of a clothing design is not subject to copyright protection. But stand-alone “flat” images are protected.
Generally speaking the shape of a clothing design is not subject to copyright protection. But stand-alone “flat” images are protected.
AllergenicCanoe 19 points 3d ago
In order to incentivize creativity and innovation, innovators are granted exclusive rights to their IP, designs, etc, for a period of time to benefit from said output. Clothing design has every merit to this protection as any other design, as long as it meets the requirements for trademarking, copyrighting or parenting
EunuchsProgramer 4 points 3d ago
Clothing can't recieve a copyright or patent by law with some very, very narrow exceptions that specifically can't be related to how the clothes look. Logos can have trademarks, so you can try your best to convince customers having your logo printed all over everything is super cool. Still, just the logo and not the clothing design being protected.
People who think IP laws are excessive and not functioning well use clothing as an example as to why copyright isn't needed.
People who think IP laws are excessive and not functioning well use clothing as an example as to why copyright isn't needed.
EmEss4242 5 points 3d ago
You can if it's a registered design. A registered design is a monopoly right for the appearance of the whole or part of a product resulting from the features of, in particular, the lines contours, shape, texture, materials of the product or its ornamentation. In order to be registered a design must be new and possess individual character and gives the holder exclusive rights to the design for up to 25 years (provided that they continually renew their registration for that time).
poorthomasmore 4 points 3d ago
There are very limited rights to designs under most countries IP laws (I do jot know about the US though.)
This gives a good breakdown from an Australian perspective: https://www.artslaw.com.au/information-sheet/protecting-your-designs/#:~:text=Design%20protections%20lasts%20for%205,on%20the%20IP%20Australia%20website.
This gives a good breakdown from an Australian perspective: https://www.artslaw.com.au/information-sheet/protecting-your-designs/#:~:text=Design%20protections%20lasts%20for%205,on%20the%20IP%20Australia%20website.
lilykitsune 254 points 3d ago
Answer: SHEIN and many other fast fashion companies benefit from stolen designs quite frequently. But they often do it in a way using several cut-outs and shell companies, so someone else assumes all of the risk of theft without the financial risk of funds or assets tied to those companies. Shell company A takes your design, modifies it slightly and sells it to company B, who goes and produces the assets and sells them to SHEIN or possibly through another company depending. Now it's not impossible for individual unrelated companies to make their money selling stolen designs to fast fashion companies, but the suit is alleging that this is all being done under the SHEIN leadership with their knowledge and their hand in the creation of those kleptocompanies.
In cases like this where there are multiple entities doing different things that would potentially create tons of different plaintiffs and defendants trying to prove specific damages for specific companies, they can gather them all under one RICO case and not play the runaround game.
Consider how it is used against the mafia and how that applies here quite well. It is difficult to pin any specific crimes on Tony when he has capos and underlings and other folks doing the acts and not speaking or taking the fall for things they were ordered to do. Now you don't have to prove individual crimes for each person, you are trying to establish that it is all organized crime under specific leadership. They're establishing organized crime here, but the crime is infringement rather than drugs and guns and extortion and so on.
In cases like this where there are multiple entities doing different things that would potentially create tons of different plaintiffs and defendants trying to prove specific damages for specific companies, they can gather them all under one RICO case and not play the runaround game.
Consider how it is used against the mafia and how that applies here quite well. It is difficult to pin any specific crimes on Tony when he has capos and underlings and other folks doing the acts and not speaking or taking the fall for things they were ordered to do. Now you don't have to prove individual crimes for each person, you are trying to establish that it is all organized crime under specific leadership. They're establishing organized crime here, but the crime is infringement rather than drugs and guns and extortion and so on.
ProDr0xx 79 points 3d ago
Don't forget about the forced labour and poor working conditions for a majority of the staff, not just those who work at the pretty factory that they invited all those influencers to.
lilykitsune 39 points 3d ago
Oh for sure, but let's not pretend that's the rea$on they're going after SHEIN.
jeanleonino 24 points 3d ago
The Mafia part is more related to this part of the lawsuit:
>Shein’s misconduct is committed not by a single entity, but by a de-facto association of entities. And just as intended by Congress, the same decentralization that facilitates Shein’s criminal infringement and other racketeering activity, renders individual components of the enterprise, such as Defendants, liable under civil RICO.
>
>Source.
Since there's this corporate structure that you can't just sue one company to be responsible, the lawsuit is saying that the association of entities are doing this crime.
>Shein’s misconduct is committed not by a single entity, but by a de-facto association of entities. And just as intended by Congress, the same decentralization that facilitates Shein’s criminal infringement and other racketeering activity, renders individual components of the enterprise, such as Defendants, liable under civil RICO.
>
>Source.
Since there's this corporate structure that you can't just sue one company to be responsible, the lawsuit is saying that the association of entities are doing this crime.
lilykitsune 3 points 2d ago
I felt like I was hitting on that?
>In cases like this where there are multiple entities doing different things that would potentially create tons of different plaintiffs and defendants trying to prove specific damages for specific companies, they can gather them all under one RICO case and not play the runaround game.
But if your thing clarified for anyone, thats cool.
>In cases like this where there are multiple entities doing different things that would potentially create tons of different plaintiffs and defendants trying to prove specific damages for specific companies, they can gather them all under one RICO case and not play the runaround game.
But if your thing clarified for anyone, thats cool.
Realistic_Line3818 1 points 1d ago
Fast fashion is a made up term by the media. Stop gatekeeping
lilykitsune 1 points 1d ago
Should I just call it bullshit sweatshop knockoff churning mill? Is there a more concise name that you would approve of?
JACrazy 63 points 3d ago
Answer: from the article OP linked
>Shein is a popular online destination for social influencers and shoppers to stock up on trendy yet affordable clothing, but a new lawsuit alleges that the site maintains its edge by engaging in "egregious" copyright infringement that constitutes racketeering.
>The complaint was filed on Tuesday in California federal court on behalf of three designers who claimed they were "surprised" and "outraged" to see their products faithfully copied and sold by the Chinese fast-fashion retailer.
...
>As a result, the claimants are alleging a violation of the RICO Act, which is "designed to address the misconduct of culpable individual cogs in a larger enterprise," the lawsuit noted.
>What is a RICO charge?
>The RICO Act of 1970 was designed as a way to combat the exploitation of legal businesses by organized crime, according to the Justice Department. While often viewed as a law to combat organized crime, the RICO Act also has been used to prosecute white-collar crimes like the Enron accounting scandal and Bernie Madoff's financial pyramid scheme.
>Racketeering typically refers to an illegal activity carried out by extortion or fraud, but the RICO Act also has a civil section that can be used for consumer protection or to protect against commercial fraud, according to the Justice Department.
>"It is well established that egregious copyright infringement (of the type alleged here, and of the type referenced in other similar cases against Shein) constitutes racketeering," the lawsuit claims.
Tldr: its a RICO charge because they are a large organization stealing copyrighted designs.
>Shein is a popular online destination for social influencers and shoppers to stock up on trendy yet affordable clothing, but a new lawsuit alleges that the site maintains its edge by engaging in "egregious" copyright infringement that constitutes racketeering.
>The complaint was filed on Tuesday in California federal court on behalf of three designers who claimed they were "surprised" and "outraged" to see their products faithfully copied and sold by the Chinese fast-fashion retailer.
...
>As a result, the claimants are alleging a violation of the RICO Act, which is "designed to address the misconduct of culpable individual cogs in a larger enterprise," the lawsuit noted.
>What is a RICO charge?
>The RICO Act of 1970 was designed as a way to combat the exploitation of legal businesses by organized crime, according to the Justice Department. While often viewed as a law to combat organized crime, the RICO Act also has been used to prosecute white-collar crimes like the Enron accounting scandal and Bernie Madoff's financial pyramid scheme.
>Racketeering typically refers to an illegal activity carried out by extortion or fraud, but the RICO Act also has a civil section that can be used for consumer protection or to protect against commercial fraud, according to the Justice Department.
>"It is well established that egregious copyright infringement (of the type alleged here, and of the type referenced in other similar cases against Shein) constitutes racketeering," the lawsuit claims.
Tldr: its a RICO charge because they are a large organization stealing copyrighted designs.
zilchhope 3 points 2d ago
So it's like a real life Los pollos Hermanos you mean?
Hawx130 7 points 2d ago
Answer: In July 2023, three independent designers filed a lawsuit against Shein, alleging that the fast-fashion giant had engaged in a pattern of copyright infringement. The lawsuit, which was filed in California federal court, alleges that Shein used a "secretive algorithm" to identify trending art and then reproduced the independent designs for its website. The lawsuit also alleges that Shein has used a "byzantine shell game of a corporate structure" to avoid liability for its copyright infringement.
The lawsuit is seeking damages for copyright infringement, as well as injunctive relief to prevent Shein from continuing to infringe on the designers' intellectual property. The lawsuit also seeks to hold Shein liable under the Racketeer Influenced and Corrupt Organizations Act (RICO), which is a federal law that was originally designed to prosecute organized crime.
Shein has denied the allegations in the lawsuit, and has said that it will "vigorously defend" itself. The case is still ongoing, and it is not clear how it will be resolved.
The RICO charges against Shein are serious, and if they are proven true, the company could face significant financial penalties. The charges could also damage Shein's reputation, and could make it more difficult for the company to do business in the United States.
The case is being closely watched by other fashion brands, as it could have implications for the industry as a whole. If Shein is found liable for copyright infringement under RICO, it could set a precedent that other brands could use to sue for similar violations.
It is still too early to say what the ultimate outcome of the case will be. However, the RICO charges against Shein are a significant development, and they could have a major impact on the company's future.
The lawsuit is seeking damages for copyright infringement, as well as injunctive relief to prevent Shein from continuing to infringe on the designers' intellectual property. The lawsuit also seeks to hold Shein liable under the Racketeer Influenced and Corrupt Organizations Act (RICO), which is a federal law that was originally designed to prosecute organized crime.
Shein has denied the allegations in the lawsuit, and has said that it will "vigorously defend" itself. The case is still ongoing, and it is not clear how it will be resolved.
The RICO charges against Shein are serious, and if they are proven true, the company could face significant financial penalties. The charges could also damage Shein's reputation, and could make it more difficult for the company to do business in the United States.
The case is being closely watched by other fashion brands, as it could have implications for the industry as a whole. If Shein is found liable for copyright infringement under RICO, it could set a precedent that other brands could use to sue for similar violations.
It is still too early to say what the ultimate outcome of the case will be. However, the RICO charges against Shein are a significant development, and they could have a major impact on the company's future.
peterburress 54 points 3d ago
Question: what is shein
Moclordimick 59 points 3d ago
Online retailer that sells clothes and trinkets etc
Spiritual-Aioli7489 -9 points 2d ago
Lk
blisstonia 6 points 2d ago
What?
TheSameAsDying [OP] 4 points 3d ago
A Chinese fast-fashion retailer, similar to H&M, Zara, or Uniqlo.
panini_bellini 205 points 3d ago
I wouldn’t put SHEIN in the same category as those retailers. It’s more in the family of AliBaba and Wish.
ElectronicShredder 16 points 3d ago
What happened to wish tho?
Arcade_Kangaroo 27 points 3d ago
Temu put a stake through its heart
eZ_Link 2 points 3d ago
What happened to it? It’s still up and running
jupiterLILY 34 points 3d ago
Yep, I don’t really shop anymore, but when I did you could get recycled clothes at H&M and they would also take bags of clothing to recycle in exchange for a discount.
badkarma765 8 points 2d ago
H&M are still terrible ethically though, despite whatever meager actions you're describing
jenacious 28 points 3d ago
Those retailers are still fast fashion. Just because you think the quality is better doesn't mean they aren't absolute shit shows when it comes to sustainability and slave labor.
Ophelia_Y2K 9 points 2d ago
yes but shein is worse. it’s comparing bad to worse but still if you’re going to shop at one, ethically shein is still worse than the others
just saying “they’re all bad” encourages people to put no thought into the ethics at all, realistically speaking
just saying “they’re all bad” encourages people to put no thought into the ethics at all, realistically speaking
badkarma765 3 points 2d ago
I would. The category being, the most egregious fast fashion companies
PuddingAndPie01 40 points 3d ago
It's a lot worse than those others you mentioned isn't it? I know most high street brands have unethical practices but shein is way above and beyond them right?
jeanleonino 55 points 3d ago
Oh boy you will not be happy looking up what Zara does.
That whole industry is fucked up, as far as I know SHEIN grew because they would pay their suppliers upfront, making them ditch companies like Zara that would delay or even not pay if an item did not sell well (but was manufactured anyways)
That whole industry is fucked up, as far as I know SHEIN grew because they would pay their suppliers upfront, making them ditch companies like Zara that would delay or even not pay if an item did not sell well (but was manufactured anyways)
ElectronicShredder 40 points 3d ago
>but was manufactured anyways
This is the kind of shit that fills landfills without having actual use.
We trash tons of edible food daily, companies trash tons and tons of plastic shit and shitty clothing that never was never used, sold or even distributed.
This is the kind of shit that fills landfills without having actual use.
We trash tons of edible food daily, companies trash tons and tons of plastic shit and shitty clothing that never was never used, sold or even distributed.
josiahpapaya 12 points 3d ago
Zara also has an entire department whose job it is to scour independent retailer’s online stores to steal ideas. There was a post on Reddit years ago with side by side pics of everything from one of their collections that was stolen from an Etsy store. I think the particular collection was kinda pop-art themed with earrings and shoes and everything and almost everything was identical to someone someone else made. But it’s basically impossible to sue them.
As an aside, the fame dev King does the same thing (CandyCrush). They steal ideas from independent developers who put their stuff up on sites looking to promote and pay out nothing.
As an aside, the fame dev King does the same thing (CandyCrush). They steal ideas from independent developers who put their stuff up on sites looking to promote and pay out nothing.
triangles4 2 points 2d ago
That is also how department stores work! They have contracts that require manufacturers to buy back products that don't sell
Braxo 10 points 2d ago
I purchased a SHEIN gift card for my cousin, was sketched out so used a generated temporary credit card that my credit card allows me to do - and basically 48 hours later that temporary card was used for fraudulent activity.
serendippitydoo 2 points 2d ago
What credit card is that? It sounds like something I'd sign up for
Heavyweighsthecrown 2 points 2d ago
No, they're all equally fucked
badkarma765 2 points 2d ago
SheIn may be the worst, but all those mentioned are in the worst tier together
peterburress 4 points 3d ago
Thank you
cheesekneesandpeas 2 points 2d ago
I wouldn’t say it’s similar at all
ChaoticxSerenity 1 points 2d ago
Uniqlo isn't fast fashion D:
gerd50501 16 points 3d ago
Answer: There is not enough in that story to know. There is an accusation and a lawsuit. If there is really RICO violations involved I am sure they can report it to the FBI to investigate. I think this is a wait and find out situation. Lawsuits tend to take years so it will be a while to see what happens.
sumguysr 5 points 2d ago
They're suing under the civil part of RICO. It's not a criminal case.
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