Shein comes under stricter safety curbs as EU toughens laws

The online retailer, which is headquartered in Singapore, has said it has around 108 million monthly active users in the 27-nation EU

By AFP

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Photo: Reuters
Photo: Reuters

Published: Fri 26 Apr 2024, 5:03 PM

The European Union on Friday added Chinese-founded online retailer Shein to its list of digital companies that are big enough to come under stricter safety curbs.

The company joins Facebook, TikTok, X, YouTube and others on a list of "very large online platforms" which have more than 45 million monthly active users in the European Union.


From the end of August — four months after the designation — Shein will have to abide by tougher rules set out in the Digital Services Act (DSA), one of the EU's landmark laws against online platforms.

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They include implementing measures to "protect consumers from purchasing unsafe or illegal goods, with particular focus on preventing the sale and distribution of products that could be harmful to minors," the European Commission said.

Shein, which is headquartered in Singapore, has said it has around 108 million monthly active users in the 27-nation EU.

Reacting to the announcement, Shein said it would comply with the rules.

"We share the commission's ambition to ensure consumers in the EU can shop online with peace of mind, and we are committed to playing our part," said Leonard Lin, global head of public affairs at Shein.

Beyond the EU, Shein has faced criticism over alleged exploitation of low-paid factory workers and arguments it promotes hyperconsumerism and causes damage to the environment.

Brussels has flexed its legal muscle against the world's biggest digital platforms, launching investigations against TikTok, X and Chinese retailer AliExpress.

Another Chinese shopping app, Temu, is expected to be added to the EU's list after announcing in April that it has around 75 million monthly active users after entering the EU market a year ago.

Under the DSA, the platforms must assess the specific risks posed to Europeans' rights and safety by the content they publish — or the products on sale in the case of online marketplaces like Amazon and Shein — and submit a report to regulators.

They must also provide an external audit once a year to verify compliance.

The largest platforms are also subject to increased transparency requirements, with the obligation to provide access to their data to researchers approved by Brussels.

The EU has taken tougher action against China-linked companies in recent months.

Popular video sharing app TikTok, owned by China's ByteDance, has faced intense scrutiny in the EU — and beyond.

While it faces a ban in the United States, TikTok is the subject of two investigations by the European Commission over alleged harm to minors.

On Wednesday, TikTok suspended its reward programme on its spinoff Lite app after the commission started a probe into its possible addictive features.

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