European Commission Investigates Shein Over Potential Violations
The European Commission has initiated a comprehensive investigation into the e-commerce platform Shein, citing concerns over “addictive design, lack of transparency in recommendations, and the sale of illegal products, including child sexual abuse material.” This action was confirmed by the EU executive on Tuesday, following previous requests for information from the Chinese company.
Background of the Investigation
Last November, the European Commission took notice of reports indicating that illegal products were being sold on Shein's platform, particularly in relation to the outrage in France over the sale of inflatable dolls resembling children. This prompted Brussels to demand further information from Shein, marking a serious response to the alleged violations.
Scope of the Investigation
The focus of this formal investigation will examine the “systems that Shein has implemented to limit the sale of illegal products” within the European Union. This includes content that could qualify as child sexual abuse material, such as the aforementioned child-like sex dolls. Moreover, the investigation will scrutinize the “risks associated with the addictive design of the service” and assess the transparency of Shein's content and product recommendation systems.
Context of Allegations
In November, after the troubling reports emerged from France regarding the dolls, public protests ensued. The French government announced its intention to suspend the Shein website. In light of these events, the EU Commission clarified that their actions were in response to serious concerns: “We take this very seriously. We are stating that sex dolls that mimic children have no place on the Internet,” officials affirmed.
Previous Inquiries and Regulatory Framework
This current request marks the third inquiry into Shein over a two-year period. Earlier, in June 2024, similar inquiries were made, comparing Shein's practices to those of another major Chinese e-commerce company, Temu. The investigations sought clarity on mechanisms for reporting illegal products, the transparency of recommendation systems, and the traceability of merchants on the platform. In February of the previous year, the Commission also demanded internal documentation related to the risks of illegal products on the site.
Implications Under the Digital Services Regulation (DSA)
These claims have been issued under the Digital Services Regulation (DSA), which governs the responsibilities of large digital platforms that pose greater risks for illegal activity. Given that Shein boasts over 45 million users — approximately 10% of the EU population — the company is subject to stringent requirements related to the control of its sales channels, including regulations against illegal products, addiction risks, and the transparency of information provided to users.
If Shein fails to meet these standards, the European Commission has the authority to initiate a case that could result in preventive measures or substantial fines.
Recent Developments in DSA Enforcement
The DSA is a relatively new framework that was approved in 2022 and is being implemented gradually into 2023 and 2024. While companies and the Commission find themselves navigating uncharted territory under this regulation, Brussels has already enforced penalties; a notable instance was the 120 million euro fine imposed on the social media platform X, owned by Elon Musk, in December.
