The European Commission has initiated a formal investigation into the online retailer Shein over suspected breaches of the Digital Services Act (DSA), focusing on concerns regarding illegal products, potentially addictive design elements, and opaque recommender systems. This development runs concurrently with recent legal proceedings in France, where a Paris court rejected a government request to suspend Shein's website but mandated age verification measures following reports of illicit items.
EU Formal Investigation into DSA Compliance
The European Commission has opened a formal investigation into Shein, a move stemming from suspected non-compliance with the Digital Services Act (DSA). The inquiry follows an earlier request for information submitted to the company.
Key areas under scrutiny include:
- Sale of Illegal Products: The investigation addresses reports of prohibited items, such as childlike sex dolls and weapons, as well as various non-compliant clothes, cosmetics, and electronic products. Concerns have been raised regarding the adequacy of Shein's systems to prevent such sales.
- Addictive Design: The Commission will assess design features like bonus point programs, gamification, and rewards, evaluating their potential to contribute to an "addictive design" and its associated risks to users' mental well-being. This marks the second such investigation into an online retail platform by the EU, following a similar inquiry into Temu in late 2024.
- Opaque Recommender Systems: Shein's product recommender systems are being examined for transparency, with suspicions that they may overwhelm users with suggestions and potentially fail to provide the DSA-mandated easily available alternative not based on profiling. Preliminary findings suggest Shein's explanations of its system's operation are overly general.
Shein has stated its commitment to DSA obligations, affirming its cooperation with the European Commission and Coimisiún na Meán, the Irish regulator overseeing the investigation. The company reported investments in compliance measures, including systemic-risk assessments, mitigation frameworks, enhanced protections for younger users, and efforts to foster a safe user experience. The Commission clarified that the investigation does not automatically imply a ban, but a block on sales remains an option if the company fails to comply with EU laws.
French Government Actions and Court Ruling
Separately, the French government initiated proceedings to suspend Shein's online platform following an investigation by prosecutors into the presence of childlike sex dolls on its website. This action followed a report from France's consumer watchdog that also cited the sale of weapons.
A Paris court subsequently rejected the French government's request for a three-month suspension of Shein's website, deeming the request "disproportionate." However, the court mandated that Shein implement age verification for all adult products sold on its site, with a non-compliance fine of €10,000 per breach. The court noted that the items in question represented isolated incidents, which Shein had removed upon notification, and that these items constituted a small fraction of the platform's overall product range. Shein had previously announced an international ban on the sale of all sex dolls after initial reports. The court also rejected a separate government request to compel Shein to suspend the sale of all third-party items.
Shein issued a statement affirming its commitment to enhancing control processes in collaboration with French authorities, prioritizing consumer protection and adherence to local laws and regulations.
Contextual Events
These developments coincided with the opening of Shein's first global physical store in Paris in early November. The store's launch on the sixth floor of the BHV department store attracted both customers and protestors, with objections related to the sale of specific items and concerns regarding Shein's fast-fashion business model.
In 2023, the EU’s justice commissioner previously raised concerns over the safety of certain products found on Shein, citing examples such as baby soothers posing choking hazards, clothing containing banned chemicals, and children’s sweatpants with unsafe waist ties.