France Escalates Legal Fight Against Shein: 12 Federations, 100 Brands Head to Court

Shein, once again in the crosshairs of the French fashion industry. Twelve trade and industry federations in France, along with more than a hundred brands, have decided to take the Chinese group to court. The group has filed an action for “unfair competition” against the ultra-fast fashion platform at the Commercial Court of Aix-en-Provence, where a first hearing has been set for January 12th, with the aim of obtaining compensation for the damage they attribute to the group’s model.

In a joint statement, the organizations denounce that Shein’s model “rests on the non-respect of the regulations applicable to all the actors implanted in France” and that this situation “endangers the safety of consumers, weakens our companies, destroys jobs and threatens the vitality of the territories”. “French trade is open to competition, but fair competition, respectful of the rules and of people”, the signatory entities underline.

The action, described by its promoters as “unprecedented in scope”, comes after the accumulation in recent weeks of open fronts for the company founded in China in 2008, regularly accused of not respecting European standards in terms of trade, consumer safety and labor law, and recently singled out for the sale of sex dolls with childlike appearance.

The twelve federations involved include the French Trade Council (Cdfc), the large-scale retail organizations (FCD), the clothing and textile industry federations (Alliance du commerce, Ffpapf, Ufimh, UIT and the Fédération de la maille, de la lingerie et du balnéaire), as well as the jewelry (Boci, UBH), toy (Fcjpe), franchising (FFF) and e-commerce and distance selling (Fevad) organizations.

French industry has organized an unprecedented common front

This sectoral front has also been joined by more than one hundred companies, including Coopérative U, Promod, Monoprix, the fashion company Grain de Malice and the footwear company Besson. Federations and companies “affirm their determination to re-establish fair competition based on respect for the law” and also demand “recognition of the economic damage suffered” by retailers established in France, as well as the award of “damages commensurate with these losses”.

The damage of the affected companies, still under evaluation, could reach “several hundreds of millions, even several billions of euros”, according to the lawyer of the federations and plaintiff companies, Cédric Dubucq. The lawyer warns that, should the court order the cessation of the unlawful behavior attributed to Shein, this decision could “lead” to the “closure” of the platform.

In their communiqué, the federations also recall the latest convictions that have affected the company in Europe. According to the collective, Shein has been sanctioned for “misleading commercial practices”, “breaches of product conformity and safety obligations” and “violation of personal data protection regulations”, with a total amount of fines amounting to 190 million euros.

The action now announced is in addition to other proceedings already open before the same court. The federations and brands recall that Shein’s Irish subsidiaries are already being sued for “unfair competition” in the context of the judicial liquidation of the local men’s fashion brand Olly Gan, a case that is also being heard by the Commercial Court of Aix-en-Provence.

Shein opened its first physical store in France in early November.

The new plaintiff entities will voluntarily intervene in the status hearing scheduled for January 12th, which will fix, among other things, the timetable for the proceedings. The pleadings hearing could take place within “between twelve and eighteen months”, depending on the progress of the proceedings.

In the words of Yohann Petiot, CEO of Alliance du commerce, this is a “first step” that sends a message to other e-commerce platforms: “impunity is over,“ he says, referring to the impact of ultra-fast fashion models on the French commercial fabric.

Shein has responded to this move with a statement in which it describes the legal action as “unfounded” and considers that it “resembles more an attempt at a boycott than a serious legal initiative.“ The group maintains that the procedure “departs from the spirit of French and European competition law, whose vocation is to protect innovation and guarantee free choice for consumers, not to restrict it”.

From the government, the reaction has been one of explicit support for the trade. Serge Papin, Minister for Small and Medium-Sized Enterprises, Trade and Crafts, welcomed the initiative: “Today, it is no longer only the State that is acting, it is twelve federations and more than a hundred professionals who are demanding that Shein repair the damage caused by its unfair competition practices,“ he said.

“These proceedings show one simple thing: some platforms break prices by trampling on our rules; it is dumping, and it distorts the entire market, destroys our stores and deceives consumers,“ concluded the minister.