Shein has over 45 million monthly users in the European Union, which is above the threshold for designation as a VLOP. The European Commission said on Friday that Shein will now have to comply with rules under the DSA within four months of notification, equating to by the end of August 2024.
The act means Shein could be liable for fines of as much as 6% of global revenue for violating the law, designed to curtail the spread of illegal content online.
Obligations will include more diligent surveillance of illegal products; enhanced consumer protection measures and more transparency and accountability.
The Commission states that “Shein must put in place mitigation measures to address risks, such as the listing and sale of counterfeit goods, unsafe products and items that infringe on intellectual property rights.”
Obligations under the DSA also state that Shein must produce annual risk assessment reports which “must specifically evaluate any potential adverse effects on consumer health and safety, with an emphasis on the physical and mental wellbeing of underage users.”
Platforms already drawn under the DSA include YouTube, Facebook, and X (formerly known as Twitter). Other marketplaces which have over 45 million monthly active users in the EU including AliExpress and Amazon have also been designated.
The DSA also requires online marketplaces to trace the sellers on their platform, add methods for customers to flag illegal content and randomly test for illegal products.
In a statement issued on Friday 26 April, Leonard Lin, Shein’s global head of public affairs said: “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. We also share a commitment to the principles of transparency and accountability that are the core of the DSA, as reflected in our supply chain governance standards and our engagements with our users. We will continue to work constructively with the European Commission to ensure that we deliver a safe and compliant environment for our online community.”