The European Union has opened a formal investigation into fast‑fashion giant Shein over possible breaches of digital law, including concerns about the sale of illegal products such as childlike sex dolls.
This is according to a press release from the European Commission on Tuesday announcing the move under the bloc’s Digital Services Act.
The investigation comes as EU regulators step up scrutiny of online platforms to ensure they protect consumers, limit harmful content and provide transparent systems for users.
What the European Commission said
According to the European Commission, the investigation will examine Shein’s systems for its addictive design, the lack of transparency of recommender systems, as well as the sale of illegal products, including child sexual abuse material.
More specifically, the investigation will focus on the following areas:
- “The systems Shein has in place to limit the sale of illegal products in the European Union, including content which could constitute child sexual abuse material, such as child-like sex dolls.
- The risks linked to the addictive design of the service, including giving consumers points or rewards for engagement, as well as the systems Shein has in place to mitigate such risks. Addictive features could have a negative impact on users’ wellbeing and consumer protection online.
- The transparency of the recommender systems that Shein uses to propose content and products to users. Under the DSA, Shein must disclose the main parameters used in its recommender systems and it must provide users with at least one easily accessible option that is not based on profiling for each recommender system,” they stated
Backstory
Concerns over Shein’s platform surfaced last year when French authorities reported the company for selling sex dolls with a childlike appearance.
- Shein responded by removing the products, banning the sellers, and halting the sale of all sex dolls globally, while cooperating with local and international investigations.
- The Commission noted that Shein had been previously responsive to information requests, but that systemic risks on its platform, particularly regarding minors and addictive content, warranted a formal investigation.
This step allows the EC to impose enforcement measures, including fines of up to 6% of a company’s global sales, of which Shein reported $38 billion in sales for 2024.
More insights
After opening the formal proceedings, the Commission will continue gathering evidence through additional requests for information, monitoring actions, and interviews with Shein or third parties.
- The proceedings allow the Commission to take further enforcement measures, including interim steps or adopting a non-compliance decision, and it can also accept commitments from Shein to address issues identified during the investigation.
- The Digital Services Act does not set a legal deadline for concluding proceedings. The investigation’s duration will depend on factors such as the complexity of the case, Shein’s cooperation, and the exercise of rights of defense.
- The opening of proceedings does not predict the outcome or any other related actions the Commission may pursue under the DSA.
Shein has said it is cooperating with EU authorities and has invested in measures to strengthen compliance, including improved risk assessments and enhanced protections for younger users.
What you should know
The Digital Services Act has been in force since late 2023 and gives the European Commission the power to investigate and fine large online platforms that fail to protect users or comply with transparency requirements.
These investigations have also delved into other major digital platforms, such as X, over harmful and sexually explicit deepfake content.
The EU has also opened formal proceedings against platforms like TikTok over alleged failures to protect minors and ensure transparency, underscoring the law’s focus on user safety.
Meta’s platforms Facebook and Instagram have been investigated under the DSA for concerns about addictive design and child safety, reflecting wider regulatory pressure on large tech firms.
