Brussels (Brussels Morning Newspaper) – Online Chinese marketplace Shein faces potential penalties with the European Union imminently preparing to open a probe into its adherence to consumer laws over the sale of illicit products, Bloomberg reported.
The European Commission, also known as the EU’s executive branch, will oversee national consumer protection regulators in a joint act against the fast-fashion marketplace. Bloomberg revealed the report, citing two sources with knowledge of the matter who requested anonymity to talk about confidential plans.
The investigation will be launched by the Brussels-based executive alongside four member nations, according to the sources, with any fines to be determined by national governments.
The European Commission increasingly depends on an instrument known as the Consumer Protection Cooperation Network, which seeks to marshal national authorities to create a unified front against large online platforms supposed to violate consumer protection regulations.
Which other Chinese app faced EU investigation?
The European Union previously opened its investigation into the Chinese-owned e-commerce platform Temu on October 31, 2024, because of its alleged concerns over how the company violates the Digital Services Act.
This was prompted after complaints about how Temu did not effectively prevent illegal or counterfeit products from getting sold as well as use addicting design features, like reward systems with elements of a game. Another is the transparency of product recommendation algorithms that the platform avows in an investigation of compliance with its commitments to data accessibility to researchers.
This move came five months after Temu was designated as a “Very Large Online Platform” under the DSA, requiring heightened regulatory oversight to ensure consumer protection and marketplace fairness.