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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 coordinated action against the fast-fashion marketplace, according to two people 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 e-commerce service Temu and Apple also faced similar actions in November for potential violations.
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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 e-commerce platforms being used to ship unsafe products from China and other non-EU countries.
By Gian Volpicelli and Samuel Stolton
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