How seriously is the EU taking e-commerce consumer protection violations? The European Commission and national consumer authorities have just delivered a clear answer by launching coordinated enforcement action against SHEIN, targeting widespread breaches of EU consumer law across multiple member states.
This enforcement action will be particularly relevant for manufacturing and trading company managers operating in the e-commerce space or selling through online marketplaces. The comprehensive investigation reveals how EU authorities are scrutinising common online retail practices, providing valuable insights into compliance expectations for digital commerce operations.
Led by authorities in Belgium, France, Ireland, and the Netherlands under European Commission coordination, this Consumer Protection Cooperation (CPC) Network action demonstrates the EU’s unified approach to cross-border consumer protection enforcement.
Six major consumer law violations identified
The investigation uncovered systematic breaches across SHEIN’s platform operations. Fake discounts topped the list, with SHEIN showing price reductions not based on actual prior prices. Pressure selling tactics included false purchase deadlines designed to rush consumer decisions.
Missing, incorrect, and misleading information about returns and refunds violated consumers’ legal rights. The platform failed to process returns and refunds according to EU requirements, leaving consumers without proper recourse.
Deceptive product labels suggested special features that were actually legally required standards. Misleading sustainability claims provided false information about environmental benefits. Hidden contact details made it difficult for consumers to reach SHEIN with questions or complaints.
Broader compliance concerns under investigation
Beyond the six identified violations, the CPC Network requested additional information to assess SHEIN’s compliance with other EU consumer obligations. Product rankings, reviews, and ratings may be presented in misleading ways to consumers.
Authorities are investigating whether SHEIN properly informs consumers about shared obligations between third-party sellers and the platform. Questions remain about when consumer rights apply in contracts involving third-party sellers who are not classified as traders.
Digital services act inquiry runs parallel
This consumer protection action complements the ongoing Digital Services Act (DSA) inquiry conducted by the Commission. Both actions aim to ensure safe, trustworthy online environments where European consumer rights receive full protection.
SHEIN received Very Large Online Platform (VLOP) designation under the DSA on 26 April 2024. This status brings the most stringent obligations, including requirements to assess and mitigate systemic risks from platform services.
Current DSA inquiries examine illegal content and goods on SHEIN’s marketplace, recommender system transparency, and measures to mitigate consumer protection, public health, and user wellbeing risks.
One month deadline for response and commitments
SHEIN now has one month to respond to the CPC Network’s findings and propose commitments addressing the identified consumer law issues. Depending on the response, authorities may enter dialogue with the company to resolve concerns.
Failure to address CPC Network concerns could trigger enforcement measures from national authorities. Potential penalties include fines based on SHEIN’s annual turnover in affected EU member states, demonstrating the serious financial consequences of non-compliance.
Comprehensive e-commerce toolbox deployment
This action forms part of the Commission’s comprehensive EU toolbox for safe and sustainable e-commerce, published on 5 February 2025. The toolbox outlines how e-commerce import challenges can be addressed throughout product lifecycles.
Joint CPC Network enforcement actions and close coordination with DSA enforcement represent integral elements of this comprehensive approach. The General Product Safety Regulation (GPSR) requires economic operators established in the EU to ensure product safety compliance for all consumer products.
Implications for e-commerce operators
E-commerce platforms and online retailers should immediately review their practices against the violations identified in SHEIN’s case. Ensure pricing displays reflect genuine prior prices rather than artificially inflated reference points. Eliminate pressure selling tactics that create false urgency through fake deadlines.
Review all consumer information displays, particularly regarding returns, refunds, and legal rights. Contact details must be easily accessible to consumers seeking support or making complaints. Product labelling should accurately represent features without implying special benefits for legally required standards.
Sustainability claims require particular attention, ensuring all environmental benefit statements can be substantiated with evidence. Review how product rankings, reviews, and ratings are presented to avoid misleading consumers.
If operating a marketplace model, clarify the division of obligations between your platform and third-party sellers. Ensure consumers understand when their rights apply and how to exercise them effectively.
The coordinated action against SHEIN demonstrates the EU’s commitment to enforcing consumer protection laws across digital commerce platforms. Companies that proactively address these compliance areas will be better positioned to avoid similar enforcement actions whilst building consumer trust in their operations.
Don’t wait for regulatory attention to focus on your platform. Start reviewing your consumer protection practices now against the standards highlighted in this high-profile enforcement case.
Source: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1331
