Shane: EU tightens rules on Chinese fast fashion giant

Shein is again on the radar of the authorities. Brussels on Friday added cheap ready-to-wear champion Shein to the list of very large online platforms subject to increased scrutiny under new digital services legislation (DSA).

The app, founded in China in 2012 and a symbol of the social and environmental excesses of low-cost fashion, becomes the 23rd platform, along with X, TikTok, Google or Facebook, to be subject to the EU’s strictest rules aimed at “protecting consumers from”. illegal content,” the European Commission said in a press release.

Shein, a fast fashion specialist headquartered in Singapore, sells her clothes exclusively online to a young clientele with a strong social media presence. The company says 108 million users in the European Union use its site every month, well above the 45 million threshold at which players may be subject to tighter regulation.

These companies should, in particular, analyze the risks associated with their services in terms of the distribution of illegal content or products and develop means to mitigate them. This analysis should be the subject of an annual report submitted to the European Commission, which now assumes the role of the EU’s digital policeman.

“Let’s protect consumers”

“Measures must be taken to protect consumers from purchasing dangerous or illegal products, with particular attention to preventing the sale and distribution of products that may harm minors,” the Commission explained.

Very large platforms must also give the regulator access to their algorithms so that compliance with the regulation can be monitored. They must undergo an independent external audit once a year at their own expense. These obligations will apply to Shein from the end of August.

Violators of the rules can be fined up to 6% of their annual global turnover or even banned from operating in Europe in cases of serious and repeated violations.

Reacting to being described as a very large platform on Friday, Shein reiterated his desire to comply with European regulations. “We share the Commission’s commitment to ensuring EU consumers can shop online with peace of mind and are committed to playing our part,” said Leonard Lin, the Commission’s global head of communications.

The very large platforms subject to increased European regulation also include online retail giant Amazon and its rival AliExpress, a subsidiary of Chinese giant Alibaba.

Topic coming soon

Another Chinese e-commerce app, Temu, is expected to be added to the list soon after announcing in April that it has around 75 million monthly users in the European Union.

This week, the DSA demonstrated its effectiveness by requiring TikTok to suspend the EU functionality of its new TikTok Lite app, which rewards users for time spent in front of screens.

The commission feared the risk of addiction, especially among teenagers, and launched an investigation. She suspects the social network, owned by the Chinese group ByteDance, of not conducting a mandatory risk analysis, in particular for the mental health of users.

However, under the DSA, Brussels also launched an investigation in December targeting social network X for alleged breaches of content moderation obligations.