EU Launches Investigation into Shein Over Illegal Products and Addictive Design Concerns

The European Commission has officially opened an investigation into the Chinese online retailer Shein, focusing on multiple suspected breaches of European laws. The inquiry commenced following the company’s failure to provide adequate information as requested last year, particularly concerning the sale of childlike sex dolls and weapons. A senior official from the EU pointed out alarming reports regarding a range of non-compliant products sold by Shein, which include clothing, cosmetics, and electronics. The investigation will delve into three main areas that have raised significant concerns among EU regulators. Firstly, aside from the sale of illegal products, the inquiry will scrutinize the potentially addictive design of Shein’s service. This includes evaluating their bonus points programs, gamification elements, and reward systems, which may pose risks to users' mental well-being. The officials asserted that Shein’s recommender systems might overwhelm users with excessive product suggestions. 'We suspect that Shein's system is not built to avoid the sale of illegal products,' one official stated, highlighting ongoing concerns over the platform's compliance framework. This latest investigation is the second of its kind initiated by the EU regarding the design of online retail platforms, following a similar inquiry into another company, Temu, launched in late 2024. Furthermore, the EU indicated that Shein's recommender systems could be violating the transparency requirements set forth by the bloc's Digital Services Act (DSA). Under this legislation, platforms must provide users with easily accessible alternatives that are not based on profiling; however, the initial findings suggest that Shein only offers vague explanations of its recommender system functionalities. This investigation arises just months after the French government backed down on a proposal to suspend Shein for three months, after discovering illegal products available on their site. The French investigation is primarily examining the legality of products sold, contrasting with the EU's more systemic approach to the platform's operational practices. In a December court session, the French state's lawyer argued for stricter controls on Shein's website, including age verification measures to prevent minors from accessing pornographic content. While the French actions have influenced public perception, EU officials have emphasized that their investigation is a comprehensive evaluation of Shein's operations, independent from France's inquiries. 'What happened in France is a piece of the puzzle, but we are focused on the overall system,' noted a senior official. The EU first requested information about Shein’s compliance with the DSA in April 2024. It has since found that Shein views its operations as low-risk concerning EU laws, whereas the Commission believes there is a high likelihood of the company selling non-compliant products. In response to the investigation's initiation, the EU stated that Shein is cooperating with the Commission, clarifying that the inquiry does not immediately imply that the service will face a ban. However, it added that a prohibition on Shein's ability to sell in Europe could be enforced as a last resort if the company fails to address regulatory concerns. In a recent judgment, the Paris judicial court acknowledged significant risks posed to public order but ruled that the sale of contentious items by Shein had only occurred sporadically. Consequently, the court ordered an injunction preventing Shein from selling sexual products that could be categorized as pornographic, unless robust age verification measures are implemented. Related Sources: • Source 1 • Source 2