The Chinese-founded massive online marketplace Shein faces potential fines with the European Union imminently set to open a probe into its compliance with consumer laws over the sale of illegal products.
The bloc’s executive branch, the European Commission, will lead national consumer protection regulators in a co-ordinated action against the fast-fashion marketplace, according to two sources familiar with the matter, who were granted anonymity to discuss confidential plans.
The probe will be launched by the Brussels-based executive alongside four member states, according to the people, with any fines to be decided by national governments.
The commission is increasingly relying on a mechanism known as the Consumer Protection Cooperation Network, which aims to marshal national authorities to form a unified front against large online platforms suspected of breaching consumer protection rules. Chinese-owned ecommerce service Temu and Apple also faced similar actions in November for potential violations.
Companies found to have broken the law can be hit by fines by national regulators in individual EU member states.
A spokesperson for Shein, which is now headquartered in Singapore, said the company intends to work closely with regulators to address any concerns. The commission didn’t immediately respond to a request for comment.
Separately, the commission, which has spent the last decade trying to establish the EU as the world’s digital rule-maker, is this week unveiling a new strategy aimed at cracking down on ecommerce platforms being used to ship unsafe products from China and other non-EU countries. – Bloomberg
