Dive Brief:
- Shein must provide internal documents and detailed information to the European Commission about its recommender system and the risks linked to the potential sale of illegal products on its platform, according to a news release last week.
- The Commission is additionally asking the fast fashion giant to provide information about measures taken to mitigate risks relating to consumer protection, including user data, as well as public health and users’ wellbeing.
- Shein has until Feb. 27 to provide the information, after which the Commission will determine next steps, which could include a formal opening of proceedings against Shein, per the release.
Dive Insight:
The European Commission sent Shein the request for information under the Digital Services Act, an EU law meant to protect the digital sphere from illegal content and protect users’ fundamental rights online.
This request is related to another EU request sent to Shein and its fast fashion competitor Temu last June, which asked both fast fashion giants to detail their compliance with the DSA. That request also focused on potential illegal products and the transparency of recommender systems. The resulting investigation led to two separate probes into Temu.
The European executive body said that the request for information is without prejudice to a separate, ongoing investigation by the Consumer Protection Cooperation Network into Shein, which is also being coordinated by the Commission.
“Shein shares the CPC Network’s goal of ensuring European consumers can shop online with peace of mind, and we intend to work closely with the CPC Network and the Commission to address any concerns,” Shein said in its own press release last week. “...Regulatory compliance is a cornerstone of our business strategy, and we have built teams in Europe and around the globe focused on key areas such as product safety, customs, and tax compliance.”
The fast fashion company additionally said it plans to invest more than $15 million into its product safety testing and compliance protocols. Last year, Shein completed more than 2 million product safety tests through third-party testing agencies, per its release. The company said it terminated more than 260 sellers on its marketplace that didn’t meet its compliance standards.
Prior to announcing the new request for information from Shein, the Commission released what the European body called a “toolbox for safe and sustainable e-commerce” in the EU. The Commission said this would ensure that imported products shipped directly to consumers would comply with EU rules and fair trading practices.
In its release, Shein said it would look into the EU’s recommendations to “examine how Shein can play our part in strengthening our industry to enhance the online shopping experience for European consumers.”
