EU Scrutinizes Shein for Consumer Protection Violations

The European Union is set to issue a warning to the online marketplace Shein, escalating its investigation into consumer protection within the company, according to sources cited by Bloomberg. The Commission and European national watchdogs will outline detailed complaints against the Singapore-based Shein and demand corrective actions in an intensified probe of the fast-fashion platform that could come as early as next week, said the sources, who requested anonymity because the plans are private. This move, known as a ‘common position,’ is the next step in an investigation into Shein’s compliance with product safety and consumer rights rules that began in February. If Shein fails to address the violations raised by the Commission, regulatory authorities could impose fines of at least 4% of its annual sales in affected member states. The EU created the Cooperation Network on Consumer Protection to form a united front across the bloc against online platforms suspected of violating laws aimed at protecting customers from misleading and deceptive practices online. Chinese e-commerce service Temu and American tech giants Apple Inc. and Meta Platforms Inc. were also targeted through this framework last year. Shein, Temu, and other e-commerce companies are separately under scrutiny as part of a broader EU plan to make it harder for low-value products to enter the European market through a review of customs rules.