Online Retailer Shein Under Fire for Potential Violation of EU Law, Alleged by EU Consumer Regulators - Online retailers under fire for alleged violations of EU regulations
EU Initiates Probe Against E-Commerce Giant Shein over Consumer Protection Breaches
National consumer protection authorities from Belgium, France, Ireland, and the Netherlands, in collaboration with the Consumer Protection Cooperation (CPC) network, have launched a joint probe into the Chinese online retailer Shein. The investigation aims to ensure transparency and fairness in online shopping for EU consumers.
Investigators have identified several concerned areas in Shein's operations. One such issue is the use of inflated starting prices for products to make discounts appear larger than they actually are. Additionally, the company employs pressure tactics such as countdown timers that continuously reset, creating an illusion of limited-time offers.
Another issue that has come to light involves misleading product labels, particularly in relation to sustainability claims. Certain product features are portrayed as special or unique when they are already legally required standards, potentially misleading consumers.
Shein's platform also lacks transparency, particularly regarding return policies and cancellation and refund rights. Consumers have found it difficult to contact the company's customer service or submit complaints, restricting their ability to seek redress or raise concerns.
The company has also been criticized for unclear seller responsibilities and product information. The CPC network has requested further clarification on how Shein discloses who the actual seller is and how it manages product classifications, reviews, and ratings.
Shein has been given one month to respond to these concerns with measures to correct identified breaches. Failure to take adequate steps may result in fines from the European Commission and national authorities overseeing enforcement.
Michael McGrath, Commissioner for Justice and Consumer Protection, emphasized that EU consumer protection laws are mandatory for all companies selling products in the EU, regardless of their location. The investigation and potential sanctions against Shein send a clear message that manipulative and deceptive commercial practices will be held accountable.
It is crucial for Shein to address these issues promptly to avoid further enforcement actions, including substantial fines. The EU Commission has proposed a flat fee for packets from countries outside the EU, specifically targeting platforms like Shein or Temu, as a means to finance additional work in customs offices.
- The investigation by the EU, concerning Shein, highlights the need for the e-commerce giant to revise its competition policy, particularly in relation to deceptive pricing, pressure tactics, and misleading product labels, as these practices contravene business ethics and consumer protection laws within EC countries.
- In the context of the ongoing probe into Shein's operations, the European Commission has signaled its intention to enact competition policy reforms, potentially including the implementation of financial measures such as a flat fee for packets from non-EU countries, which could support customs offices and discourage manipulative business practices.
