The European Commission said it has opened formal proceedings against Shein under the Digital Services Act (DSA). Regulators will investigate the Chinese-founded online discount fashion retailer over its allegedly addictive design, lack of transparency in recommender systems, and the sale of illegal products, including material that could amount to child sexual abuse and child-like sex dolls.
If found non-compliant, Shein could be required to change its practices or face substantial fines. The Commission said it was launching an in-depth investigation, not issuing findings, and that it could not yet say how long the probe would take.
Investigation focus
– Systems to prevent the sale of illegal products in the EU, including content that could constitute child sexual abuse material, such as child-like sex dolls.
– Risks tied to the platform’s alleged addictive design — for example, rewards for engagement — and the measures Shein has to mitigate those risks.
– Transparency of recommender systems used to suggest content and products, including disclosure of main parameters and provision of at least one easily accessible option for users that is not based on profiling, as required by the DSA.
Background
The controversy over sex dolls resembling children surfaced in November during the opening of a Shein store in Paris, prompting protests and calls from the French government for an EU investigation. Shein also faced criticism for listings of illegal weapons, including firearms, knives and machetes. France sought to suspend access to Shein’s site domestically, but a court blocked that move and asked the Commission to pursue a DSA investigation.
The Commission said the platform’s design features could negatively affect users’ wellbeing and online consumer protection. Under the DSA, platforms must be transparent about recommender systems and offer non-profiling alternatives for recommendations.
Jurisdiction and company details
Ireland’s Digital Services Coordinator, Coimisiun na Mean, will be associated with the probe because the Republic of Ireland is Shein’s EU base. Many multinationals locate EU operations in Ireland due to its relatively low corporation tax regime.
Shein reported global turnover of roughly $38 billion for 2024. The company moved its global headquarters from China to Singapore to facilitate international expansion and regulatory and financial positioning.
Edited by: Louis Oelofse