The European Union is going on the offensive against Shein. Invoking the Digital Services Act (DSA) – the legal text allowing the EU to regulate the digital environment of companies – the EU has announced the opening of a formal investigation into Shein. The Chinese company is accused of selling illegal items in certain member countries and creating addiction among users. The Asian giant had already been denounced by the French government for offering child pornography sex dolls on its e-commerce site.
Risks of addiction and illegal products
Brussels therefore wants to verify the limits that Shein has imposed on itself regarding the sale of illegal items, while also examining whether the design of the Chinese company's apps creates addiction among users. Among the critical points is an analysis of the risks associated with awarding points or rewards to visitors to the site.
"In the EU, illegal products are banned, whether they are on store shelves or online marketplaces," explained Henna Virkkunen, Vice President of the Commission for Technological Sovereignty. "The Digital Services Act ensures the safety of buyers, protects their well-being, and informs them about the algorithms they interact with."
Transparency of algorithms and profiling
The recommendation system, which suggests new products for customers to buy, will also have to be closely examined to ensure that it complies with the transparency requirements of the Digital Services Act. In its note, Brussels also points out that EU legislation requires companies to offer at least one option that is not linked to user profiling.
Shein—although long in the crosshairs of European institutions—is not the only digital player under investigation: recently, for example, the EU has opened numerous investigations, again under the DSA, into the social network TikTok.