EU Launches Formal Investigation Into Shein Over Multiple Suspected Breaches
The European Commission has announced a formal investigation into the Chinese online retailer Shein, targeting several areas of concern under European Union laws. This probe, initiated on Tuesday, follows a request for information made to the fast-growing company last year, as confirmed by senior EU officials.
Focus on Illegal Products and Addictive Design
The investigation will scrutinize three primary aspects of Shein's operations. Firstly, it will examine the sale of illegal products, including childlike sex dolls and weapons, which have been reported to violate EU regulations. An EU official stated, "We have a suspicion that the system of Shein is not built to avoid the sale of illegal products. Illegal products? There is still a lot there so something is probably not working." This includes non-compliant items such as clothing, cosmetics, and electronic goods.
Secondly, the inquiry will assess the addictive design of Shein's platform. This involves features like bonus points programs, gamification, and rewards that officials believe could pose risks to users' mental well-being. This marks the second such investigation into an online retail platform's addictive elements, following a similar probe into Temu in late 2024.
Opaque Recommender Systems Under Scrutiny
Additionally, the EU is investigating Shein's recommender systems, which are alleged to be opaque and potentially non-compliant with the transparency requirements of the Digital Services Act (DSA). Under DSA rules, platforms must provide at least one easily accessible alternative recommendation system not based on profiling. The EU found that Shein only explained its recommender mechanisms "in a very general manner," raising concerns about user manipulation and overwhelming product suggestions.
Context and Previous Actions
This European investigation comes months after the French government considered a three-month suspension of Shein's services due to illegal products on its site. Although the French probe focuses on product legality rather than systemic issues, a Paris court hearing in December highlighted the need for age verification and filtering to prevent minors from accessing pornographic content. The court issued an injunction requiring Shein to implement such measures if selling sexual products.
EU officials emphasized that their investigation is separate from national actions, stating, "What happened in France is a piece of the puzzle but we are looking at the system at large. We are not focusing only on what happened in France." The EU first requested information on Shein's DSA compliance in April 2024 and has concluded that while Shein views its services as low-risk, the EU considers them high-risk for breaching laws.
Cooperation and Potential Outcomes
Shein is cooperating with the European Commission, and the investigation does not imply an immediate ban. However, officials noted that blocking Shein's sales in Europe remains a last resort if the company fails to comply with EU regulations. The Paris judicial court acknowledged that Shein had removed illegal products and described their sale as sporadic, but maintained the injunction to prevent future violations.
This development coincides with Shein opening its first physical store in Paris, amid heightened police presence, underscoring the ongoing scrutiny of its business practices in Europe.
