As of mid-2026, Shein is defending a major Texas Attorney General lawsuit over toxic chemicals and data privacy, a newly filed California class action over fake discount pricing, a European Commission investigation under the Digital Services Act, and ongoing text-message cases under federal telemarketing law. The Shein lawsuit activity in 2026 also builds on recent settlements, including a $700,000 California shipping-delay judgment in 2025 and a $1.9 million New York data-breach settlement from 2022, and it has helped stall the company’s long-sought initial public offering.
Texas Attorney General Sues Over Toxic Products and Data Privacy
Texas Attorney General Ken Paxton sued Shein US Services LLC and several affiliates, including Shein Distribution Corporation, Shein Technology LLC, Roadget Business Pte Ltd., and Zoetop Business Co., on February 20, 2026, in the District Court of Collin County. The claims are brought under the Texas Deceptive Trade Practices Act and cover two distinct theories.1Texas Attorney General. Petition Against Shein US Services LLC
Toxic Chemical Claims
The petition alleges Shein sells clothing, toys, accessories, and home décor containing lead, PFAS, phthalates, cadmium, and formaldehyde at levels exceeding U.S. safety standards, without disclosing those hazards to buyers.1Texas Attorney General. Petition Against Shein US Services LLC The state leans on testing by Greenpeace, which found that 32 percent of 56 Shein garments it tested in late 2025 exceeded EU chemical limits, with PFAS in water-repellent jackets measuring up to 3,269 times the EU threshold.2Greenpeace. Shame on You Shein A December 2025 follow-up found 81 percent of 31 additional products exceeded EU limits.3Greenpeace. Shame on You Shein II
Data Privacy and China Allegations
The petition calls the Shein platform a “data siphon leading directly to the Chinese government” and argues that because Shein operates partly in China, the Chinese Communist Party could compel access to U.S. consumer data under Chinese national intelligence, cybersecurity, and data laws. Texas characterizes Shein’s failure to flag that risk in its privacy policy as “material and deceptive,” arguing consumers would not have transacted with the company had they known. The suit followed Governor Greg Abbott’s January 26, 2026 decision to place Shein on the Texas Prohibited Technologies List, barring its use on state employee devices after a Texas Cyber Command threat assessment.4DLA Piper. Texas AG Sues Shein Over Alleged Deceptive Practices and Data Privacy Risks
What Texas Is Seeking
Texas is asking for civil penalties of up to $10,000 per violation, rising to $250,000 per violation when the conduct targeted consumers 65 or older. The state also wants a permanent injunction blocking Shein from collecting or sharing consumer data without clear notice and informed consent, and requiring disclosure of products containing harmful chemicals.1Texas Attorney General. Petition Against Shein US Services LLC Shein has said it disagrees with the allegations and is cooperating with investigations.5Environment + Energy Leader. Toxic Products, Exposed Data: Texas Is Making Shein Answer for Both The complaint was one of five that Paxton filed in four days against companies he described as tied to the Chinese Communist Party.6Texas Attorney General. Attorney General Ken Paxton Files Fifth Anti-CCP Lawsuit
Fake-Discount Class Action in California
On May 5, 2026, three consumers filed Severino et al. v. Shein US Services LLC et al. (Case No. 3:26-cv-04062) in the U.S. District Court for the Central District of California. Named plaintiffs Stacee Severino, Gayle Brownlee, and Pooja Prakash allege that Shein runs a “systematically deceptive pricing scheme” by displaying fabricated reference prices to make routine prices look like steep markdowns.7Courthouse News Service. Consumers in Class Action Accuse Shein of Promoting Fake Discounts
The complaint relies on 12 months of tracking data from tools such as AliPrice and Microsoft Shopping. Products including a GLOWMODE sports bra and an “EZwear” clothing set were advertised at more than 40 percent off a listed “retail price” the items had either never sold at or had only briefly touched in the previous six months.8ClassAction.org. Shein Lawsuit Accuses Retailer of Using Fake Sales to Drive Purchases The suit brings claims for fraud, unjust enrichment, negligent misrepresentation, and violations of California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act, and seeks restitution, disgorgement, punitive damages, and injunctive relief. The case is in its early stages.7Courthouse News Service. Consumers in Class Action Accuse Shein of Promoting Fake Discounts
European Commission Digital Services Act Investigation
The European Commission formally opened proceedings against Shein under the Digital Services Act on February 17, 2026. Regulators are examining whether Shein has adequate systems to block the sale of illegal products in the EU, including content that may constitute child sexual abuse material; whether design features such as reward-based engagement mechanisms create addictive effects; and whether the company complies with transparency rules for its recommender systems.9EUcrim. Overview of the Latest Developments Under the Digital Services Act The Commission had sent three requests for information between June 2024 and February 2025 before escalating.10Digital Policy Alert. Shein — Digital Services Act Formal Proceedings No penalties have been announced.
Text Message Class Actions
Shein has faced at least two class actions under the federal Telephone Consumer Protection Act. An earlier case in the Southern District of Florida alleged the company used an auto-dialing system to send promotional texts, including flash-sale coupons and free-shipping offers, without prior consent. A second complaint, filed in July 2025 in the Southern District of Indiana, alleges Shein sent marketing texts to consumers listed on the national Do-Not-Call Registry who never signed up for them.11Fashion Dive. Shein Class Action Lawsuit Do Not Call The Indiana plaintiffs are seeking monetary relief and a jury trial; no ruling or settlement has been reported.
Recent Settlements Still Shaping the 2026 Picture
Two older resolutions keep surfacing in the current wave of litigation. In July 2025, Shein resolved a consumer protection suit brought by the district attorneys of Los Angeles, Napa, San Francisco, and Sonoma counties in Napa County Superior Court. The complaint alleged Shein routinely failed to ship online orders within 30 days of payment and failed to provide the delay notices or refund options California law requires. Without admitting liability, Shein paid $600,000 in civil penalties split among the four offices and $100,000 in investigative costs, and agreed to a judgment prohibiting misleading shipping statements.12San Francisco District Attorney. Fast Fashion Company Shein Settles Consumer Protection Action13LA County. Fast Fashion Company Shein Settles Consumer Protection Lawsuit for $700,000
The New York Attorney General’s 2022 settlement with Zoetop, Shein’s then-parent, is the other recurring reference point and figures directly into the Texas data-privacy case. A June 2018 cyberattack had compromised 39 million Shein accounts and seven million Romwe accounts, exposing names, email addresses, hashed passwords, and some credit card numbers. The NYAG found that Zoetop failed to notify 32.5 million affected customers, publicly understated the breach, and falsely claimed no credit card data had been taken. The company stored card numbers in plain text in debug logs, used a weak password hash, lacked regular vulnerability scanning, and had no written incident response plan. On October 12, 2022, Zoetop and Shein Distribution Corporation agreed to pay $1.9 million in penalties and costs and to maintain a comprehensive security program for seven years.14New York Attorney General. Attorney General James Secures $1.9 Million From E-Commerce Shein and Romwe Owner Zoetop15New York Attorney General. Zoetop Assurance of Discontinuance
Copyright and RICO Suit by Independent Designers
In July 2023, independent designers Krista Perry, Larissa Martinez, and Jay Baron sued Shein in the Central District of California, alleging copyright infringement and civil racketeering through what the complaint called “a long and continuous pattern of racketeering” built on systematic intellectual property theft. Judge Mark C. Scarsi declined to dismiss the RICO claim, ruling that the plaintiffs had sufficiently alleged copyright infringement and mail fraud as predicate acts.16Bloomberg Law. Shein Fails to Escape RICO Claims in Designers Copyright Suit17Time. Shein Lawsuit Copyright Infringement Court records show the case was terminated on September 9, 2025; the terms of any resolution are not detailed in available records.18CourtListener. Perry v. Shein Distribution Corporation Shein has been a defendant in more than 50 federal intellectual property cases in the United States.
How the Litigation Has Stalled Shein’s IPO
The combined pressure has derailed Shein’s listing plans in three jurisdictions. The company first explored New York, then abandoned that path after bipartisan lawmakers urged the SEC to block the IPO until Shein could verify its supply chain was free of forced labor; a 16-state attorney general coalition led by Montana sent a separate August 2023 letter raising the same forced-labor concerns alongside data-collection and de minimis import objections.19Reuters. Shein’s Pursuit of an IPO: New York, London, Hong Kong20Montana Department of Justice. Attorney General Knudsen Leads 16-State Coalition Sounding Alarm on Shein Business Practices
London came next. Britain’s Financial Conduct Authority approved the listing in April 2025, but Chinese regulators at the CSRC never signed off, and a parallel EU finding that Shein had breached consumer protection laws over fake discounts, pressure selling, and misleading sustainability claims added to the drag.21CNBC. Shein’s Embattled IPO Signals Mounting Troubles for Fast Fashion Giant By July 2025, Shein had confidentially filed a draft prospectus in Hong Kong, reportedly to pressure UK regulators into moving.22CNBC. Shein Files for Hong Kong IPO in Hopes of Salvaging London Listing Shein’s estimated valuation has fallen from roughly $50 billion to around $30 billion during the controversies, and no public listing has materialized in any jurisdiction as of mid-2026.