Shein is facing a formal investigation by the European Commission into whether the online retailer is complying with obligations under the EU’s Digital Services Act, the Commission’s executive arm said Tuesday. The probe focuses on whether Shein has taken sufficient steps both to limit the sale of illegal products on its platform and to protect users, according to the Commission.
The Commission said the investigation was opened under the Digital Services Act, which requires the largest online platforms to take “extra steps” to safeguard internet users from dodgy products, the AP reported. The Commission added that, if it reaches a non-compliance decision after an in-depth investigation, Shein could be required to change its practices or pay a “hefty fine.”
One line of scrutiny centers on Shein’s systems and safeguards to reduce the availability of products illegal in the EU. The Commission said it is examining whether Shein has the proper safeguards in place, including items that would fall under child sexual abuse material such as “child-like sex dolls,” AP reported.
The investigation also follows recent attention to Shein’s listings in France. The AP reported that France’s authorities found illegal weapons—including firearms, knives and machetes—as well as child-like sex dolls for sale on Shein’s website. French authorities had sought to suspend access to Shein in France, but a court blocked that action and asked the Commission to investigate under the Digital Services Act.
Alongside illegal-product safeguards, the Commission said it will determine whether Shein has systems to mitigate risks it links to the company’s “addictive design.” The AP report said the Commission is focused on features that include giving users points or rewards “for engagement,” which regulators treat as part of how platform design can shape user behavior.
Regulators also are targeting the transparency of Shein’s recommendation systems, the AP reported. The Commission said it has concerns that Shein does not clearly explain to users why specific products are recommended to them, which is an issue under the Digital Services Act’s transparency expectations.
Shein said it takes its obligations seriously and plans to continue cooperating with the Commission. In a statement, the company said it has invested significantly in strengthening compliance with the Digital Services Act, describing “comprehensive systemic-risk assessments and mitigation frameworks, enhanced protections for younger users,” and ongoing work to design services to support “a safe and trusted user experience.” Shein also said, “Protecting minors and reducing the risk of harmful content and behaviours are central to how we develop and operate our platform,” according to the AP report.