Background on Shein and Relevance
Shein, a rapidly growing online fast-fashion retailer based in China, has been under scrutiny by the European Union (EU) for alleged consumer fraud practices. The EU Commission has accused Shein of misleading customers with false discounts and other irregularities, initiating formal investigations since February.
Investigation Details and Timeline
The EU Commission, in coordination with the European Consumer Protection Centre (CPC), has been investigating Shein since February. Authorities in France, Ireland, and the Netherlands are also involved in this investigation.
Shein has been given a one-month deadline to respond with commitments that address the identified issues before national authorities can consider potential sanctions.
Alleged Irregularities by Shein
- False Discounts: Shein has been accused of offering misleading discounts by displaying fake price reductions compared to previous prices that do not reflect reality.
- Misleading Purchase Deadlines: The company has been accused of pressuring customers by providing false purchase deadlines.
- Inaccurate Legal Information: Shein has been criticized for providing misleading or deceptive information regarding consumers’ rights to return or refund products.
- Misleading Product Labeling: The retailer has been accused of using misleading product labeling, attributing characteristics that do not correspond to reality.
- False Durability Claims: Shein has been accused of providing false or misleading information about the durability of its products.
- Withholding Crucial Consumer Information: The company has been criticized for failing to provide necessary contact information as required by EU legislation, making it difficult for customers to reach out with inquiries or complaints.
Next Steps and Potential Consequences
If Shein fails to respond adequately within the one-month deadline, national authorities may agree on coercive measures, including financial penalties based on the company’s business volume.
Additional Requests from EU
Alongside the ultimatum, the EU has requested detailed information from Shein regarding other practices to verify compliance with community obligations. This includes measures taken to prevent misleading promotional information on their platform.
