Shein faces EU investigation over illegal products and addictive design features

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LONDON (AP) — European Union regulators are investigating Shein over concerns the online retailer hasn't done enough to limit the sale of illegal products or protect users from the platform's allegedly addictive design.

The 27-nation bloc's executive arm said Tuesday that it opened formal investigation under the bloc's sweeping rulebook known as the Digital Services Act, which requires the biggest online platforms to take extra steps to protect internet users from dodgy products.

Shein may be required to alter its actions, or pay a hefty fine if a so-called non-compliance decision is reached following an in-depth investigation, the European Commission said.

One area its investigation is focusing on is whether Shein has the proper safeguards in place to limit the sale of products that are illegal in the EU, the commission said, including items that amount to child sexual abuse material such as "child-like sex dolls."

The the fast-fashion giant came under fire last year in France, where authorities found illegal weapons including firearms, knives and machetes as well as child-like sex dolls for sale on its website. The French government sought to suspend access to the Shein site in France. A court blocked that action and asked the commission to investigate under the bloc’s Digital Services Act.

The commission says it will also determine whether Shein has systems to mitigate risks related to what it says is the platform’s addictive design, which includes giving users points or rewards “for engagement.”

And regulators are also targeting the transparency of Shein’s recommendation systems that suggest more products to consumers. They’re concerned that the company doesn’t clearly explain to users why they’re being recommended specific products.

Shein said it takes its obligations seriously and will continue to cooperate with the commission.

The company said it has invested significantly in strengthening compliance with the DSA. The measures “comprehensive systemic-risk assessments and mitigation frameworks, enhanced protections for younger users, and ongoing work to design our services in ways that promote a safe and trusted user experience.”

“Protecting minors and reducing the risk of harmful content and behaviours are central to how we develop and operate our platform," the company said in a press statement.