On Friday, May 23, according to informed sources, the European Union is set to issue a formal warning to the online retail platform Shein, escalating the investigation into consumer protection issues regarding the company.
Insiders indicated that the European Commission and regulatory authorities across Europe will level specific charges against Shein, headquartered in Singapore, demanding corrective actions, with the process potentially commencing as early as next week. Due to the classified nature of the plan, the sources requested anonymity. They added that the measure, known as a “common position,” is still in the drafting stage and its contents may undergo changes or delays before being made public.
This action marks the latest development since the EU launched an investigation in February this year on whether Shein complies with product safety and consumer protection laws. Should Shein fail to adequately address the violations presented by the EU, regulatory authorities have the authority to impose fines of at least 4% of the company’s annual sales in affected member states.
The EU has established the Consumer Protection Cooperation Network, aimed at jointly monitoring online platforms suspected of violating consumer rights protection laws. Last year, Chinese e-commerce platform Temu, American tech giants Apple Inc., and Meta, the parent company of Facebook, were also subjects of investigations by this regulatory body.
Moreover, Shein, Temu, and other e-commerce platforms are facing another broader reform within the EU, as a project aims to limit the influx of low-priced goods into the European market by amending customs laws.
Reportedly, Shein has not immediately commented on the matter, while the European Commission has declined to offer a statement.