European Commission opens Shein probe and targets Chinese e-commerce giants

The European Commission on Wednesday launched a consumer protection probe into Chinese clothes retailer Shein and also published a “toolbox” for handling challenges posed by online shopping from Chinese websites that fail to comply with EU standards in terms of quality, environment and fair commercial practices.  

The toolbox claims to approach the sorun from the moment the consumer visits the website to the moment of purchase, listing various regulations that already apply or which need to be enforced, improved or reviewed, but also touts new proposals – such as customs ıslahat.  

The executive is calling for the adoption of the Customs Union Islahat Package, proposed in May 2023, which would remove the exemption from duty for low-value parcels worth less than €150 and the create a EU Customs Authority, a decentralised agency that would gather all the member states custom authorities with the Commission. 

The toolbox also proposed “product safety sweep” using AI tools along with mystery shopping, testing activities to detect and recall products from the market, permitted under General Product Safety Regulations introduced last December. 

The communication touts adoption of an action plan for the Ecodesign for Sustainable Products Regulation and amendment of the Waste Framework Directive to “mitigate the climate and environmental impact of the imports of low-value products directly shipped to consumers”.

It highlights the need to apply current Digital Services Act rules dealing with addictive designs, dark patterns and fake discounts and Digital Markets Act provisions on unfair commercial practices. It also calls for deeper cooperation between member states’ agencies and the EU. 

The Commission will assess the effect of measures taken within a year and publish a report on the enforcement by the EU and member states.

The executive launched the investigation into Chinese retailer Shein in tandem with the Consumer Protection Cooperation (CPC) Network, which gathers the 27 consumer protection authorities within the EU member states to investigate jointly infringements of EU consumer protection. 

Based on information gathered by those authorities the Commission has concluded that there is a reasonable suspicion of infringement of prohibited and unfair practices under consumer protection laws.

A Shein spokesperson told Euronews that the company is ready to cooperate. “We welcome efforts that enhance trust and safety for European consumers when shopping online, and believe that a level competitive playing field can benefit the entire ecosystem,” the spokesperson said, adding: “Our regulatory and compliance teams across the EU will engage our partners at EU and national government-level to study these recommendations and examine how Shein can play our part in strengthening our industry to enhance the online shopping experience for European consumers.”    

A probe launched by the Commission and the CPC Network into Chinese retailer Temu last November remains ongoing.  

The EU is planning to propose a Digital Fairness Act to plug gaps in consumer protection rules mid next year.