Regulator warns Shein to act on 'fake deadlines and fake discounts' or face heavy fines

The Chinese retailer has one month to rectify the issues or face the consequences.

Shein has been warned it could face fines if it continues breaking EU consumer law

Shein has been warned it could face fines if it continues breaking EU consumer law, with Ireland’s Competition and Consumer Protection Commission (CCPC) hitting out at consumers put “under pressure by fake deadlines or misled by fake discounts”.

The Chinese retailer, which has expanded rapidly in recent years through its bargain online fashions, has one month to rectify the issues or face the consequences.

In February, the European Commission warned Shein and Temu, another Chinese online e-commerce platform, that they would be liable for the sale of unsafe and dangerous products sold on their sites.

Now the national consumer authorities in Ireland, Belgium, France, and The Netherlands, and the European Commission, has called on the e-retailer to rectify several practices on its platform that potentially breach EU consumer law.

“Consumers should be allowed to shop without being put under pressure by fake deadlines or misled by fake discounts. They also need clear information about how consumers can contact the company, how to return an item and receive a refund. In this case, the CCPC and the CPC Network have identified several practices that could mislead consumers or undermine their consumer rights,” said Mr Kenny.

“E-retailers and online marketplaces have a legal obligation to provide transparent and honest information about the products they sell, and consumers’ rights around returns. The CCPC takes any breaches of the law very seriously and looks forward to constructive engagement with Shein during the course of this investigation.”  

EC Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection, Ireland's Michael McGrath said the decision highlights that all companies reaching out to EU consumers "must play by our rules. Today's action sends a clear message: we will not shy away from holding e-commerce platforms to account, regardless of where they are based. EU consumer protection laws are not optional — they must be applied in all cases. I strongly welcome the decisive action taken by the CPC Network. It’s now for Shein to step up, respect the rules and bring its practices fully in line with EU consumer standards."

A Shein spokesperson said the company has been "working constructively with national consumers authorities and the EU Commission to demonstrate our commitment to complying with EU laws and regulations". "We are continuing to engage in this process to address any concerns. Our priority remains ensuring that European consumers can have a safe, reliable, and enjoyable online shopping experience."

The CCPC issues identified include:

• Fake discounts: Pretending to offer better deals by showing price reductions that are not based on the actual prior prices as required by EU law.
• Pressure tactics: Using false deadlines to put pressure on consumers to purchase.
• Missing information: Displaying incomplete and incorrect information about a consumer’s rights to return goods and receive refunds.
• Deceptive product labels: Using product labels that suggest the product offers something special when in fact the relevant feature is required by law.
• Misleading claims: Giving false or deceptive information about the sustainability benefits of certain products.
• Hidden contact details: Making it difficult for consumers to contact Shein with questions or complaints.

Information has also been requested to assess the company’s compliance with further obligations including those around product rankings, ratings and reviews, and third-party sellers.

The ongoing investigation is being carried out through the European Commission’s Consumer Protection Cooperation (CPC) Network, under the coordination of the European Commission.

“If Shein fails to address the concerns identified, national authorities can investigate further and may take enforcement measures to ensure compliance, which may include fines based on its annual turnover in the relevant member states,” said a CCPC statement.

- Additional reporting by Reuters