Shein Faces EU Warning Over Deceptive Practices
The fast-fashion giant Shein is facing significant challenges in Europe, with the European Union issuing a formal warning regarding several practices that violate consumer protection laws. The EU’s investigation uncovered a range of deceptive tactics employed by Shein, including the use of fake discounts and misleading product descriptions. These misleading promotions create a false sense of urgency and value for the consumer, potentially violating regulations designed to safeguard consumer rights.
Deceptive Marketing and Labeling
Specifically, the EU found that Shein frequently displays price reductions that do not accurately reflect a product's previous price. Furthermore, the retailer is accused of utilizing deceptive product labels, implying that items possess special characteristics mandated by law, when in reality these features are standard requirements. This practice is considered misleading advertising, undermining consumer trust.
Sustainability Claims and Return Policies
Adding to the list of concerns, the investigation also revealed that Shein makes false or deceptive sustainability claims, thereby potentially greenwashing its operations. Moreover, information regarding customer rights concerning returns and refunds was found to be incomplete and incorrect, further hindering consumer protection. The lack of readily available contact information also complicates the process of addressing customer complaints, a significant issue highlighted by EU regulators.
DSA Compliance and Potential Penalties
Shein's designation as a "very large online platform" under the Digital Services Act (DSA) subjects it to stringent rules regarding the removal of illegal content. Non-compliance could result in substantial fines, potentially reaching up to 6 percent of its global turnover. The EU has granted Shein a one-month deadline to address these concerns and bring its practices into compliance. Failure to act will result in further consequences.
Source: The Verge