EU Launches Formal Investigation into Shein
The European Union (EU) has initiated a formal investigation into the fast fashion company Shein concerning potential violations of digital law, including the sale of childlike sex dolls.
The European Commission (EC), which serves as the EU's executive branch, announced that it will scrutinize the measures implemented by the Chinese firm to prevent the sale of illegal products, specifically including content that could be classified as child sexual abuse material.
In addition, the investigation will cover the "addictive design" elements of Shein's online platform and the transparency of the algorithms used to recommend products and content to consumers.
Shein's Response to Allegations
Shein stated:
"Protecting minors and reducing the risk of harmful content and behaviours are central to how we develop and operate our platform."
Reports from the previous year indicated that French authorities had been alerted to Shein's sale of "sex dolls with a childlike appearance" on its website.
In response, Shein confirmed that it promptly removed the products, banned the sellers involved, and ceased the sale of sex dolls "regardless of appearance" across its global platform. The company also noted its cooperation with both local and international authorities in investigations targeting buyers and sellers of the childlike sex dolls.
Scope of the European Commission's Investigation
The Commission will examine the systems Shein employs to restrict the sale of illegal products, which includes weapons, although it has not specified particular items under review.
The EC has previously issued multiple requests for information to Shein. EC spokesperson Thomas Regnier told the BBC's World Business Report that Shein has been "very cooperative" throughout the process.
However, the Commission emphasized that when evidence suggests a platform may pose systemic risks to its users, it is empowered to initiate formal proceedings for a more thorough investigation.
Concerns Over Platform Design and Transparency
Regnier expressed concerns regarding the "addictive" nature of Shein's website and the "gamification" features embedded within the platform, including its "rewards programme" for consumers.
"The Commission was not against reward programmes per se, but that online platform algorithms were 'often opaque'.
"You don't know how they're being designed [and] you're not in control of what you see," he said.
The EC will also assess the transparency of Shein's "recommender systems," which utilize shoppers' data to promote specific products.
Under the Digital Services Act (DSA), Shein is required to disclose the primary parameters it uses to recommend products and must offer users "at least one easily accessible option" that does not rely on profiling their likely purchases based on personal data.
Potential Consequences and Shein's Compliance Efforts
Opening a formal investigation allows the EC to impose enforcement actions, including fines of up to 6% of a company's global sales. According to the most recent available figures, Shein reported $38 billion in sales for 2024.
A Shein spokesperson commented:
"Over the last few months, we have continued to invest significantly in measures to strengthen our compliance with the DSA.
These include comprehensive systemic-risk assessments and mitigation frameworks, enhanced protections for younger users, and ongoing work to design our services in ways that promote a safe and trusted user experience," it said.
