Shein Faces EU Scrutiny Over Consumer Protection and E-Commerce Practices
Chinese e-commerce and fast fashion giant Shein is under renewed investigation in the European Union as concerns grow over compliance with consumer protection rules. This coordinated action, launched by the EU’s Consumer Protection Cooperation Network (CPCN), aims to assess Shein’s practices in light of several directives, including the Unfair Commercial Practices Directive and Consumer Rights Directive.
While the exact concerns about Shein’s platform remain unclear, the move reflects broader EU efforts to address risks tied to a surge in low-cost e-commerce activity. On Wednesday, the European Commission revealed a set of measures and reforms aimed at tackling safety, environmental, and competition issues associated with cheap imports.
A Flood of Unsafe Imports
EU lawmakers are raising alarms about “a tsunami” of inexpensive imports that fail to meet the bloc’s standards, creating risks for consumers. Products like toys with choking hazards, poorly insulated electrical appliances, and chemically unsafe clothing were highlighted as examples.
According to Commissioner Michael McGrath, recent tests by national authorities revealed that up to 96% of products sold on such platforms don’t comply with EU safety rules. Alarmingly, the EU estimates 4.6 billion low-value consignments (goods worth €150 or less) entered the market in 2023—double the amount in 2022 and three times more than in 2021.
Addressing the Risks
The Commission’s response comes in the form of a new strategy outlined in its Communication on E-Commerce. This “Comprehensive EU Toolbox for Safe and Sustainable E-commerce” focuses on consumer safety, custom reforms, and environmental sustainability.
Key proposals include:
- Strengthening consumer protection enforcement under existing laws like the Digital Services Act and General Product Safety Regulation.
- A push for the first action plan under the Ecodesign for Sustainable Products Regulation to address environmental challenges, particularly textile waste.
- Advocating for an amendment to the Waste Framework Directive.
The EU is also developing a “Digital Fairness Act,” which aims to increase consumer protections in the digital space.
Shein Under the Spotlight
Shein and another e-commerce platform, Temu, have already been under scrutiny since June under the Digital Services Act. The platforms are classified as “very large online platforms” (VLOPs), meaning they are subject to strict oversight. Consumer groups have accused both companies of breaching EU rules, and the Commission has an ongoing Digital Services Act investigation into AliExpress, another major importer of cheap goods into the EU.
Shein responded to the CPCN’s action in a statement, saying:
“We share the CPC Network’s goal of ensuring European consumers can shop online with peace of mind, and we intend to work closely with the CPC Network and the Commission to address any concerns.”
The company also welcomed the Commission’s efforts to enhance trust and safety, claiming its on-demand model reduces inefficiency and waste. Shein added that it will engage with EU and national authorities to study the recommendations and improve industry practices.
Customs Reforms
The EU is also targeting customs reforms to address the surge in low-value imports. A proposal put forward in 2023 seeks to eliminate duty relief on packages worth under €150. Trade Commissioner Maroš Šefčovič emphasized the need for platforms to take on more responsibility as importers, ensuring better consumer protection.
The Commission is also considering complementary measures, such as introducing a non-discriminatory handling fee for goods delivered directly to consumers and creating a “customs priority control area” for e-commerce goods.
Calls for Immediate Action
European Consumer Organisation BEUC has urged the EU to act swiftly, citing tests showing many online products, like toys and textiles, are unsafe. Agustín Reyna, Director General of BEUC, stated:
“If the EU is serious about protecting consumers and hitting the road to decarbonisation, it must ensure everybody plays by the same rules.”
What’s Next?
As the EU ramps up its enforcement efforts, platforms like Shein, Temu, and AliExpress face increasing pressure to adhere to consumer protection and sustainability standards. For consumers, these changes could mean safer and more eco-friendly online shopping experiences.
Shein’s response indicates a willingness to comply, but the ongoing investigations and proposed reforms will ultimately determine how the e-commerce landscape evolves in the EU.
Stay tuned for updates as the EU continues to prioritize safe, sustainable, and fair e-commerce practices.
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