Shein is facing even more scrutiny from the United States, this time from Texas’s top cop and the chairman of the Senate intelligence committee.
On Monday, Texas Attorney General Ken Paxton said he is investigating the Chinese-founded e-commerce giant for possible violations of state rules relating to unethical labor practices and the sale of unsafe consumer products.
The same day, Senator Tom Cotton, a Republican from Arkansas, sent a letter to Attorney General Pam Bondi urging her to direct the Departments of Justice and Homeland Security to probe Shein and its biggest rival, Temu, for engaging in what he called “industrial-scale” intellectual property theft and counterfeiting that is “devastating American designers, brands and innovators.”
Both moves will almost certainly intensify the pressure on Shein, which continues to face a
virulent backlash
in France after the country’s consumer watchdog uncovered banned weapons and so-called “childlike” sex dolls on its marketplace, resulting in the French government seeking to
suspend Shein
for three months.
The Singapore-headquartered firm is also in the
throes of a lawsuit
from a coalition of thousands of French retailers who are claiming up to 3 billion euros, the equivalent of $3.5 billion, in economic damages for what they describe as unfair competition through “misleading commercial practices” and “breaches of product conformity and safety obligations.”
And when Shein opened its first permanent physical outlet at BHV Marais in Paris last month, just as the controversy of its illicit merchandise started boiling over, protestors treated it as no less than an incursion-even if their picket signs appeared to have little effect on the lines of bargain hunters that snaked around the department store.
Paxton and Cotton’s actions come less than two weeks after a bipartisan group of lawmakers from the House of Representatives wrote to Shein demanding to know if the “sex dolls with a childlike appearance” had been made available for sale in the United States before they were removed. The lawmakers also criticized the e-tailer’s
“lack of judgment,”
deeming it unacceptable that “these products were ever allowed to be sold on Shein’s website.”
Paxton said he was driven to act after numerous reports “raised concerns” about Shein’s potential use of forced labor, toxic or hazardous materials and deceptive marketing practices. His investigation, he said, will determine if the platform’s supply chain practices breach Texas law by misleading consumers about product safety and ethical sourcing.
“Safe, non-toxic material and products are another key ingredient to the Make America Healthy Again movement,” he said. “Any company that cuts corners on labor standards or product safety, especially those operating in foreign nations like China, will be held accountable.”
The probe will also examine Shein’s data collection and privacy practices, which Paxton said may pose risks to millions of American consumers. France’s data protection watchdog fined the e-tailer
150 million euros
, or $174 million, in September for “placing some cookies without the consent of internet users,” among other infractions. In 2022, Shein’s then-parent Zoetop Business Company forked over
$1.9 million
in fines to New York State after failing to “properly handle” a data breach that stole the personal information of tens of millions of customers.
“Texans deserve to know that the companies they buy from are ethical, safe, transparent and not exploiting workers or selling harmful products,” Paxton said. “I will not allow cheap, dangerous, foreign goods to flood America and jeopardize our health.”
In late November, Greenpeace
published a report
finding that many of Shein’s products contain hazardous chemicals at quantities breaching European Union regulatory limits, including phthalates and the “forever chemicals” known as polyfluorinated substances, or PFAS.
Legislators from the
United States
and the
United Kingdom
have previously cast a gimlet eye
at allegations
that the
Missguided owner’s
supply chain contains underpaid and forced labor from China-something that Shein has repeatedly denied-potentially scuppering not just one but two public floats in New York and London, respectively. Whether a
Hong Kong IPO
, as is rumored, will be third time lucky remains to be seen.
Shein said that it takes concerns such as Paxton’s seriously, is “fully committed to cooperating” and welcomes “constructive engagement” with the attorney general.
“Our mission-to provide affordable, fashionable products to customers around the world-is underpinned by a dedication to safety, compliance, and respect for human rights,” a spokesperson said. “We strive to operate responsibly across every area of our business, implementing policies designed to protect both our shoppers and those we work with.”
Writing to Bondi, Cotton expressed concern over an
Information Technology and Innovation Foundation study
in August that found that nearly half of the products that the nonprofit purchased from “suspicious listings” on Shein, Temu and AliExpress, including cosmetics, toys, luxury goods, pharmaceuticals and household items, were likely counterfeit.
Speaking at the time, Eli Clemens, an ITIF policy analyst and the author of the report, said that the proliferation of fakes was “more than a series of isolated mistakes,” but rather “a fundamental failure by these platforms to prioritize anti-counterfeiting efforts, leading to poor outcomes for brands and consumers alike.”
Cotton also cited complaints from independent artists and small American clothing brands that Shein “systematically copies” their original designs, sometimes within days of their debut, only to “sell the knock-offs at a fraction of their price.” Trademark infringement aside, the e-tailer has also been accused of violating the
Racketeer Influenced and Corrupt Organizations Act
.
The senator said that with President Donald Trump’s “decisive” eradication of the
de minimis exemption
, which previously allowed small overseas packages valued at less than $800 to bypass customs duties and close examination, Shein and Temu are now stocking “massive inventories” in U.S. warehouses and distribution centers.
“Their goods are no longer slipping through ports; they are sitting on American soil under U.S. jurisdiction,” he said. “This shift gives the Departments of Justice and Homeland Security a golden opportunity to act.”
Law enforcement already routinely raids warehouses that might be harboring counterfeit goods, Cotton said. He urged Bondi to “prioritize” Shein and Temu facilities for “immediate inspections, seizures and criminal investigations” and, in so doing, send a strong message that the United States will “no longer tolerate Chinese platforms looting American intellectual property.”
Shein continues to “invest in protecting rights holders, designers and creatives around the world,” a spokesperson said in response, adding that the company again welcomed engagement of a constructive nature. “We take claims seriously, and we are constantly improving our internal processes to better protect creators.”
Temu did not respond to a request for comment.
A hearing that will determine if and how long Shein will be suspended in France is expected to take place in Paris on Friday, though the ruling won’t be announced for a few weeks. Separately, the European Commission has requested that the marketplace provide information on how it ensures that minors are not exposed to age-inappropriate content as required under the European Union’s Digital Services Act.
