It’s a familiar David versus Goliath tale: the Nelly Group has filed a lawsuit against the Chinese giant Shein for copyright infringement. Earlier this month, the Swedish Patent and Market Court ruled that an Irish Shein subsidiary had used unauthorised copies of the Swedish online retailer’s images, but it acquitted two other subsidiaries of similar allegations. With the appeal, Nelly now wants to clarify how responsibility is apportioned within the Shein Group and examine the proportionality of the judgment. In an interview with FashionNetwork.com, CEO Helena Karlinder-Östlundh discusses her legal rationale and the boundaries of fair competition in e-commerce.
Continuing to take on Shein as CEO of the Nelly Group: Helena Karlinder-Östlundh. – Maverick Gutarra
FashionNetwork.com: Ms Karlinder-Östlundh, you’re the talk of the fashion industry because of Nelly Group’s copyright lawsuits against Shein. Have you ever regretted taking legal action?
Helena Karlinder-Östlundh: Not at all. Shein illegally used our copyrighted images and published them on its website as though they were its own. When we brought this to its attention, it disputed our ownership of the images and refused to give assurances that it would not happen again. The litigation has been both costly and time-consuming for us, but we believe it is important to pursue it. Holding Shein to account has proved difficult, and if non-European e-commerce providers can simply flout our laws like this, it undermines any sense of a level playing field in our market.
FNW: What has been your most important insight as CEO in this case so far?
HKÖ: Based on our experience to date, Shein appears to be doing everything it can to make accountability for its actions as difficult as possible. For instance, it has established a corporate structure with several companies responsible for different aspects of its operations in Sweden. As a result, we first had to invest significant time and resources to understand which company was responsible for which element, and therefore which aspects of the infringement each could be held liable for.
FNW: The other side showed little willingness to acknowledge wrongdoing, right?
HKÖ: Throughout the proceedings, Shein denied any wrongdoing- until shortly before the main hearing, when it changed its position and admitted the infringement, but claimed that only one of its companies was responsible. That gives me the impression that its multi-entity structure is a deliberate strategy to deter others from pursuing action over similar infringements.
FNW: How upset were you that the Swedish Patent and Market Court ordered you to pay Shein’s legal fees?
HKÖ: Owing to the way the judgment was worded, we were ordered to pay part of Shein’s legal fees- an amount that ultimately exceeded our own legal costs. To be honest, I was very surprised by this outcome. I had expected a clear verdict: either Shein violated our rights or not. The judgment explicitly states that all three of Shein’s legal entities contributed to the infringement and that it would not have been possible without the involvement of all three. Nevertheless, only one of these legal entities was held fully accountable and faced consequences. That did not- and still does not- make sense to me.
FNW: That does indeed sound like a contradiction in terms.
HKÖ: If such a judgment is possible at all, there is a structural flaw in the legal framework. This weakness must be remedied so that European retailers can be confident that non-European companies will also follow the same laws and face the same consequences in the event of infringements.
FNW: What is the next step in the case? What would you like to achieve by 2026? How do you think the whole thing should end?
HKÖ: We have filed an application for leave to appeal and are currently waiting for a decision before the appeal process can begin. We carefully weighed our options before deciding to appeal, fully aware that this could ultimately lead to additional costs for us. However, we firmly believe that this is an issue that European politicians and legislators need to take seriously. Current EU regulations, such as the Digital Services Act, focus primarily on consumer protection- which is important and should definitely be a top priority.
FNW: What do you think should be the next step?
HKÖ: To strengthen competition safeguards and ensure that all retailers operating in the European market follow the same rules, with a clear and effective procedure to restrict market access when those rules are not observed.
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The shares of Inditex, the largest listed company on the Spanish stock exchange, rose 1.85% on the morning of Friday, December 12, to €56.1 per share, surpassing the record high set a year ago, when they fell just short of €56.
Inditex headquarters – Inditex
According to market data compiled by Europa Press, the textile conglomerate is up more than 12% in 2025 and now has a market capitalisation of over €174 billion.
That said, Inditex’s share price had been anaemic- if not negative- over the course of the year, as from mid-March to early this month the stock traded below 2024 closing levels and touched an August low of €40.8.
The rally of the past two weeks- which has propelled the new highs- is attributable to the company’s latest quarterly results, which beat market expectations across the board.
Specifically, on December 3, the conglomerate reported a record third quarter (August to October), with profit up 9% to €1.831 billion and sales up 4.9% to €9.814 billion.
Thus, Inditex recorded net profit of €4.622 billion during the first nine months of its 2025–2026 financial year (between February 1 and October 31), an increase of 3.9% year on year.
Since the day before these latest results were announced, Inditex has gained 14% on the stock market.
Moreover, this particular milestone for Inditex has coincided with a broader one for the Spanish stock market, as its benchmark index, the Ibex 35, surpassed 17,000 points on Friday for the first time in its history.
Analysts’ assessment
“Clear path ahead,” Bank of America analysts concluded two weeks ago following Inditex’s results presentation, after a year of doubts about the outlook for the apparel sector.
“The acceleration of growth bodes well for the first half of 2027 […] and should pave the way for improvements in earnings per share,” they said. They therefore reiterated their buy recommendation while raising their price target from €54 to €60.
eToro market analyst Javier Molina noted that Inditex beat market expectations and is consolidating its transition towards a more premium positioning at a time when the consumer cycle is showing signs of moderating.
“The third quarter was particularly solid and clearly exceeded consensus forecasts,” he said, while, in his view, the shift to the luxury segment is reflected in investment in flagship stores, the renovation of strategic locations and projects such as the new Zara building in Arteixo, focused on product and technology.
The company, according to Molina, shows a “remarkable ability to adapt” to consumer preferences, consolidating collections with higher perceived value.
“But this progress comes at a demanding moment in the cycle, and the market will be watching whether the company is capable of maintaining the level it has set for itself,” he warned.
For his part, IG analyst Sergio Ávila argued that in the short term these figures support Inditex maintaining a premium to the sector, although he also warned that the bar for expectations is “very high.”
“If the company continues to defend margins and control inventories, I see a higher likelihood of consolidation at elevated levels than of a deep correction,” he said.
The most optimistic firm on the Galician group is Citi, which raised its price target from €54 to €63, while other firms such as Berenberg lifted theirs from €52 to €62 and Santander increased its from €55 to €58.40.
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The principle has been agreed, but the practical details have yet to be worked out. From July 1, a three-euro tax will be applied to small non-EU parcels entering the European Union, marking the end of the tax exemption for parcels under 150 euros, in a bid to rein in Shein and Temu.
Shutterstock
Some 4.6 billion consignments worth less than 150 euros entered the European market in 2024, at a rate of more than 145 every second. Of this total, 91% came from China. A month ago, EU finance ministers approved scrapping, from next year, the duty-free status enjoyed by these parcels.
While this measure is intended to apply to parcels from all countries outside the EU, it is primarily aimed at stemming the flood of low-priced Chinese products into Europe, which often fail to comply with European standards, and are purchased on Asian platforms such as Shein, Temu, or AliExpress.
This influx of imported parcels with no customs duty has increasingly been denounced by European producers and retailers as a form of unfair competition.
Moreover, the volume of parcels arriving at European airports and ports is so great that customs officers are frequently unable to check whether they comply. In these circumstances, it is difficult to intercept dangerous or counterfeit products before they reach consumers.
“Four years ago, there were one billion parcels arriving from China. Today, it’s more than four billion,” noted French Economy Minister Roland Lescure. “Today, these parcels represent unfair competition for city-centre businesses which pay taxes, so it’s essential to act and act fast, otherwise we will act too late,” he told AFP.
A Herculean task
France, in the midst of a stand-off with Chinese e-commerce giant Shein following the scandal over the sale of childlike sex dolls and Category A weapons, has led this battle in Brussels to scrap the exemption from customs duties on these low-value shipments.
The measure had in fact already been planned as part of the reform of the Customs Union (the European customs system), but it is not due to apply until 2028. In November, the 27 member states agreed to implement it “as soon as possible” in 2026.
But that means finding a “simple and temporary” solution for taxing these billions of parcels, until the customs data platform provided for in the reform, which should greatly facilitate the collection of customs duties, becomes operational.
According to some members of parliament, applying the usual customs duties to small parcels from 2026 onwards- with rates varying according to product category or sub-category and the country of import- would be a Herculean task, risking clogging up already overburdened customs services even further.
Roland Lescure made it clear on Thursday that he would defend “a flat-rate tax, because we want the measures taken in Europe to have an impact,” rather than “proportional taxation,” which he believes would not be a sufficient deterrent.
A first step
However, setting up a transitional system “is not easy, because we have to do it with our existing resources,” said a European diplomat, who on Thursday declined to give an exact date for the entry into force of the provisional system.
The taxation of small parcels is just the first step in the EU’s offensive against the avalanche of Chinese products entering its territory: from November 2026, it is due to be accompanied by the introduction of handling fees on these same parcels valued at less than 150 euros. In May, Brussels proposed setting them at two euros per parcel.
This sum will help finance the development of controls and, according to the EU, together with the collection of customs duties, will help level the playing field between European products and competition “made in China.”
FashionNetwork.com with AFP
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India and France have struck a deal to revise their 1992 treaty which will halve the tax on dividends paid by Indian units to French parents, potentially saving millions for companies with major operations in the South Asian nation, documents show.
Bollywood celebrity Alia Bhatt for L’Oreal, a company which could be affected by the new treaty – L’Oréal Paris
In return, India will get to widen its powers to tax share sales by French investors, and revoke the “most favoured nation” status of France that gave it certain tax advantages, according to confidential Indian government documents reviewed by Reuters.
Bilateral trade between India and France stood at $15 billion last year, and Indian Prime Minister Narendra Modi and French President Emmanuel Macron have been forging warmer ties. The two sides have been working to recast their tax treaty since 2024 to modernise it by adapting global standards on tax transparency.
“The proposed amending protocol will boost flow of investment, technology and personnel between India and France, and will provide tax certainty,” said one of the Indian government documents from August. The new treaty could have implications for large French portfolio investors as well as companies like Capgemini , Accor, Sanofi, Pernod Ricard, Danone, and L’Oreal– all of which have expanded their presence in India in recent years.
A key change is that French companies which hold a stake of more than 10% in any Indian entity will have to pay a 5% tax on the dividends they receive, instead of 10% earlier. For minority French shareholdings of under 10% in Indian companies, however, dividend tax will rise from 10% to 15%.
Many French firms’ Indian units like Capgemini Technology Services India, BNP Paribas Securities India and TotalEnergies Marketing India have declared dividends in the past, their Indian regulatory disclosures show. The Capgemini unit’s dividend stood at $500 million in 2023-24.
France’s tax office said it could not comment for this story given the negotiations are ongoing, while the finance ministry did not respond to Reuters’ queries. India’s foreign and finance ministries also did not respond. Capgemini and Danone declined to comment while the other French companies did not respond to Reuters’ queries.
Currently, India can impose taxes on any French entity’s share sale, but only when it holds more than 10% of an Indian company. The new proposed treaty will remove that threshold.
The new treaty “will provide for full source-based taxation rights in respect of capital gains on equity shares (in India),” said the Indian documents.
France-based foreign portfolio investors (FPIs) own $21 billion worth of shares in Indian companies as of November 2025, a third higher than levels in 2024, Indian share depository data shows. And more than 40 French companies hold stakes of under 10% in Indian entities, according to an analysis by Indian market intelligence platform Tracxn.
“This will impact French FPIs in India and also French companies holding minority interest in Indian companies. These investments were not subject to tax under the current treaty,” said Riaz Thingna, a partner at Grant Thornton Bharat LLP.
One official familiar with the deliberations told Reuters on condition of anonymity that Indian and French officials have agreed the terms of the new treaty, which will likely be signed in the coming weeks. In New Delhi, the deal is subject to final approval by Prime Minister Narendra Modi’s cabinet, according to the documents. Reuters is the first to report the planned changes to India-France treaty.
India has also agreed to France’s demand to limit tax on fees for technical services to cases where a French provider transfers technical know-how, removing most routine consultancy and support services from the scope of India’s tax. “This can help French companies that render services like design consultancy, cybersecurity and market research,” Thingna said.
Differences over how to interpret the so-called most-favoured nation, or MFN, clause were among the main reasons for the renegotiation, the official said. If a country has an MFN clause with India under a signed treaty, it typically starts claiming lower tax rates if New Delhi strikes more favourable tax terms later with another OECD nation. But a landmark Indian Supreme Court decision in late 2023 said countries can’t automatically start doing so, triggering concerns in France.
“This decision led to a sharp deterioration in the legal and economic security of French companies in India. The potential additional tax cost was estimated at 10 billion euros for existing contracts alone,” said the official.
India and France have reached a decision to delete the MFN clause from their treaty which had historically benefitted only France, according to Indian government documents. That was to put an end to disagreements related to its interpretation that have led to “tax uncertainty and protracted litigation,” said one document. Switzerland in January also suspended its application of the MFN clause in its India treaty citing the Supreme Court ruling.
Politics8 years ago