Chinese Fashion Group Shein Facing EU Dressing Down Over Consumer Rights

Chinese fast-fashion retailer Shein has suffered another blow after the European Commission launched an investigation into whether it has breached consumer law.

Deals Dispute

According to a Reuters report, the probe focuses on a number of issues including allegations of fake discounts, pressure selling tactics and unclear information regarding customer rights. The fake discounts potentially include pretending to offer better deals by showing price reductions that are not based on actual prior rates as required by EU law.

Other issues are said to include displaying incomplete or incorrect information about consumers’ rights on returns and refunds, misleading or deceptive claims about sustainability and consumers finding it hard to contact the company with any questions or complaints.

The probe is being co-led by Ireland’s Competition and Consumer Protection Commission (CCPC) and is being conducted alongside national consumer authorities in Belgium, France and the Netherlands.

Possible Fines

Shein has been told that it has one month to respond to the allegations and propose how it will address them.

If Shein fails to address the concerns, national authorities can investigate further and impose fines based on its annual turnover.

Patrick Kenny, CCPC Commission member, said:  “Consumers should be allowed to shop without being put under pressure by fake deadlines or misled by fake discounts.”

Shein, alongside other Chinese rivals such as PDD Holdings (PDD) owned Temu, has had a tough year, hit by Trump tariffs and the ending of de minimis tariff exemptions hitting the price of small packages.

These blows have led Shein to consider scrapping its planned IPO in London in the second half of the year. EU action on its practices could be another reason to press the pause button.

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