The European Union is taking measures to ensure a safe and transparent digital environment for online consumers living in Europe and to ensure compliance with relevant laws. In this context, China-based e-commerce platforms were scrutinized. The European Commission launched an investigation into Shein within the scope of a joint action plan initiated by national authorities in Belgium, France, Ireland, and the Netherlands and coordinated through the CPC (Consumer Protection Cooperation) network.
As a result of the investigation, various commercial practices of Shein were found to violate European consumer protection legislation. Official notifications were made to the Chinese e-commerce company. Shein was given one month to respond to complaints and offer corrective measures.
What Is Shein Violating?
The investigation covers various aspects of the online shopping experience on the platform. In this context, misleading discounts not based on previous prices and coercive sales techniques such as artificial countdowns that push users to buy quickly were identified. Additionally, it was determined that incomplete or misleading information was provided regarding cancellation and return rights. Furthermore, deceptive product labels that present mandatory product features as special, misleading sustainability claims, and lack of transparency about contact information were among the violations cited.
The CPC requested Shein to provide clarifications regarding transparency in product classifications, reviews and ratings, and the sharing of contractual responsibilities between Shein and third-party sellers. EU legislation requires that consumers must always know who the seller is and what rights apply.
The CPC’s steps are also connected to the investigation conducted by the European Commission under the Digital Services Act (DSA), which imposes increased obligations on large digital platforms. Shein has been classified as a Very Large Online Platform (VLOP) as of April 26, 2024. Within this framework, it is subject to additional responsibilities in managing systemic risks, especially those related to consumer protection.
“We Will Not Hesitate to Hold E-Commerce Platforms Accountable”
Henna Virkkunen, Vice President of the EU Commission responsible for Technological Sovereignty, made the following statement on the issue: “This investigation demonstrates our determination to provide an effective and coordinated response when online platforms and retailers fail to comply with the rules.”
Commissioner for Democracy, Justice, Rule of Law, and Consumer Protection Michael McGrath stated, “All companies targeting consumers in the EU must comply with our rules. EU consumer protection laws are not optional; they must be enforced in every case. We will not hesitate to hold e-commerce platforms accountable, regardless of where they are headquartered.”
The Shein Investigation Continues
The Commission and national consumer protection authorities launched the investigation in February. Among the violations identified within the scope of the investigation are fake discounts, pressure on consumers, incomplete and misleading information, deceptive product labeling, and hidden contact information related to Shein’s customer service.
If Shein does not provide a satisfactory response to the complaints, the national authorities of the member states may impose sanctions, including economic penalties proportional to the company’s turnover in that country.
The Commission and national authorities are also still examining whether Shein’s algorithm is misleading—particularly whether product rankings, reviews, and ratings are being presented inaccurately to consumers. In addition, Shein’s contractual obligations with third-party sellers are also under scrutiny.
Meanwhile, a Shein spokesperson stated that the company “is working constructively with national consumer authorities and the EU Commission” and is “actively engaged in the process to address any concerns.”
