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According to CNBC, Shein, a fast-fashion giant with ties to China, is suing rival Temu, accusing the retailer of stealing its designs and using counterfeiting, intellectual property infringement and fraud to build its empire.

The lawsuit, filed Monday in federal court in Washington, D.C., comes as Shein itself is fending off similar allegations from a variety of brands and independent artists, including Levi Strauss and H&M.

In its complaint, Shein accused Temu, owned by PDD Holdings, of posing as a legitimate online marketplace because it encouraged sellers to steal designs from other brands and then prevented them from removing their products from the platform, even after they admitted to infringement.

The indictment alleges that Temu lured American consumers to download and use its mobile applications at extremely low prices. However, Temu did not profit from the sales of these products, which were priced so low that Temu had to subsidize each sale and lose money on each transaction.

The lawsuit adds: Temu could only minimize the huge losses of its subsidies by encouraging sellers to infringe on others’ intellectual property rights and sell counterfeit or substandard goods.

The two competing e-tailers have taken the retail industry by storm with ultra-low prices and an ability to respond to trends far more quickly than their traditional rivals.

Along the way, the two companies have drawn a barrage of criticism for their labor practices, their ties to the Chinese government and for allegedly using designs from other brands.

The two companies have gone to court and accused each other of a series of scandals in their battle for market share. Last year, Temu sued Shein, accusing it of copyright infringement and using mafia-style intimidation of suppliers to force them into exclusive agreements.

In Shein's complaint, the company accused Temu of brazen illegal behavior.

The company said at least one Temu employee stole valuable trade secrets, including best-selling Shein products and internal pricing information, to help it compete.

The indictment states: Using this stolen information, Temu then directed its sellers to copy these and other best-selling Shein products and sell the knockoffs on Temu’s website and mobile app.

The lawsuit states: Temu was no ordinary infringer. To promote counterfeit Shein products, Temu copied copyrighted images that were nearly identical to Shein products and used them as promotional images on Temu’s website and mobile app, or directed sellers to use them.

Shein and Temu designs displayed side by side. Image credit: U.S. District Court for the District of Columbia

The company even stated that Temu was impersonating Shein on social media site X with the intention of misleading customers from the Shein platform to the Temu platform.

The complaint included a screenshot of a Temu-sponsored Google ad that listed Shein in the title but Temu as the URL.

To further deceive consumers, Temu also directed its paid social media influencers to falsely claim that Temu products (often counterfeits of Shein products) were cheaper and higher quality than authentic Shein products, the indictment states. Temu went to great lengths to imitate Shein, including poaching resources, employees, and suppliers from Shein.

Shein's 80-page complaint lists more than a dozen clothing and design samples that Temu allegedly copied.

The company has asked the court to rule in its favor and issue an order prohibiting Temu from using Shein's confidential information, among other requests.

Temu has not yet responded to CNBC's request for comment.