EU: fast fashion giant Shein must comply with consumer law

The EU Commission has announced tougher action against Chinese online trading platforms, and is currently focusing in particular on the fast fashion giant Shein. “We will not shy away from holding e-commerce platforms to account”, emphasized EU Consumer Commissioner Michael McGrath on Monday. This applies “regardless of where they are based”. EU consumer protection rules are not optional: “They must be applied in all cases”.

Commission Vice-President Henna Virkkunen, who is responsible for technological sovereignty, also expressed her determination to take “coordinated and effective” enforcement measures if online marketplaces do not comply with the law.

The reason for the harsh words: The Commission and the network of consumer authorities in the EU countries have jointly investigated promotional tactics used by Shein. According to their statements, they have identified several practices that can mislead consumers or inappropriately influence their purchasing decisions. The Chinese company is therefore in breach of EU consumer law.

Specifically, the authorities accuse Shein of luring potential buyers with bogus discounts. Discounts are stated that are not based on the actual “previous prices”. Consumers were also put under pressure by manipulative designs to complete purchases immediately under the pretense of arbitrary deadlines. In addition, incomplete and incorrect information about consumers' legal rights to return goods and receive refunds and slow processing of returns. Further points of criticism: Deceptive product labels, misleading sustainability claims and a lack of contact details.

Shein must deliver within one month

The network is also requesting information from Shein on how the company ensures that product rankings, ratings, and reviews are not presented to consumers in a misleading manner, for example through algorithms. The operator now has one month to respond to the results of the investigation. If necessary, the authorities could impose fines if Shein does not address the concerns. Further investigations by national supervisory authorities and the Commission are running in parallel. The latter is examining whether the platform is complying with the Digital Services Act (DSA).

Shein did not initially respond to a request for comment from heise online on Monday afternoon. When the German government announced increased market surveillance of large Chinese providers such as Temu and Alibaba in January, the company emphasized its efforts to “comply with all laws and regulations in the markets in which we operate”. Shein has employees in the EU “who specialize in key areas such as tax, customs, and compliance”.

(wpl)