The European Union on Friday, April 26, 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” that have more than 45 million monthly active users in the European Union. Shein, which is headquartered in Singapore, has said it has around 108 million monthly active users in the 27-nation EU.
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. 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.
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.
EU probes
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.