The European Commission has determined that Shein, the prominent Chinese online retailer recognized for its extremely low prices, violates EU legal standards regarding unfair business practices. This conclusion was reached following an examination conducted alongside various national consumer protection agencies.
Investigators determined that Shein attracts customers through deceptive discounts, often by showing incorrect original prices or employing countdown timers that restart repeatedly to create a fabricated sense of immediacy.
The Commission along with the Consumer Protection Cooperation (CPC) Network—a group consisting of national authorities—highlighted significant issues regarding transparency: incorrect return policies, deceptive sustainability assertions, and perplexing product labeling. Additionally, regulators pointed out that the difficulty platforms impose on contacting customer support hampers users’ capacity to voice inquiries or grievances effectively.
Shein has been allotted one month to reply and detail its plan for addressing these problems. Should the Commission find no improvement, the company might incur penalties. Oversight of this enforcement will be conducted by national authorities from Belgium, France, Ireland, and the Netherlands.
All businesses operating within the European Union must adhere to our regulations,” stated Michael McGrath, Commissioner for Justice and Consumer Protection. “This initiative makes one thing abundantly clear: we won’t hesitate to ensure accountability among online marketplaces, irrespective of their location.” He further emphasized: “The provisions safeguarding consumers in the EU aren’t discretionary—they apply universally.
This isn’t the first instance where a Chinese platform has faced scrutiny. In November, competitor e-commerce site Temu was likewise
found in breach
Of EU consumer law. It employed equally questionable strategies and even took an additional step by “gaming” the shopping process through wheel-spin promotions and showing fabricated customer reviews.
In addition to the consumer law investigations, both Shein and Temu are also being examined for potential violations of the Digital Services Act.
DSA probe
centers on algorithmic recommendation systems – the way particular products are showcased to individual users – along with the trade of illicit items, including those not adhering to EU health and safety regulations.
