Europe warns Shein that it may be “breaking” the law with fake discounts or “misleading” labels

The Consumer Protection Cooperation Network (CPC Network), a European coordination space for national consumer protection authorities created by the EU, and the European Commission warned Shein on Monday of a series of practices on its platform that could “infringe” EU consumer protection legislation and ordered it to “adjust” them.

This was stated by the Commission in a statement, emphasizing that the CPC Network’s action against Shein is being led by the competent national authorities of Belgium, France, Ireland, and the Netherlands, under the coordination of the Commission itself. The platform remains under investigation after being asked to provide more information to the CPC Network.

The investigation covers a “wide range” of practices consumers face when shopping on Shein, which the investigation says could “infringe” EU law, particularly regarding fake discounts, sales under pressure, incorrect information, misleading labels and sustainability claims, and hidden contact details.

Regarding fake discounts, the investigation alleges that the platform may be “pretending” to offer better deals by displaying price reductions that are not based on actual past prices, and, regarding high-pressure sales, it may be putting consumers “under pressure” to complete purchases using tactics such as “fake” purchase deadlines.

In turn, it accuses the platform of displaying “incomplete and incorrect” information about consumers’ legal rights to return goods and receive refunds and of failing to process returns and refunds in accordance with their rights.

MORE VIOLATIONS

At the same time, it criticizes the use of product labels that suggest the product offers “something special” when, in fact, “the relevant feature is required by law”; the use of “false or misleading” information about the sustainability benefits of its products; and the fact that users “cannot easily contact” Shein with questions or complaints.

In addition, the CPC Network has requested information from Shein to assess its compliance with other obligations under EU consumer protection law, such as the obligation to ensure that product reviews and ratings are not presented to consumers in a “misleading” manner, among other practices.

Shein now has one month to respond to the CPC Network’s findings and propose “commitments” on how it will address the identified “issues.” If it fails to address the “concerns” raised, national authorities can take enforcement measures to “ensure compliance,” including the possibility of imposing fines based on Shein’s annual turnover in the affected EU member states.