After consumer protection scrutiny dialled up on fast-fashion giant Shein in the European Union on Wednesday, the bloc’s executive announced Thursday that it’s sent a fresh request for information (RFI) to the ecommerce platform under the Digital Services Act (DSA), a pan-EU online governance framework.
The Commission oversees larger platforms’ compliance with a subset of DSA rules in areas like algorithmic transparency requirements — including an obligation to give data access to researchers so they can study systemic risks.
On paper, penalties for non-compliance can reach up to 6% of global annual turnover, although so far the EU has yet to issue any DSA fines on any of the designated very large online platforms (VLOPs) or search engines (VLOSE) — despite opening a number of investigation proceedings and making multiple requests for information to several platforms.
The latest RFI to Shein covers a number of areas, with the Commission asking the ecommerce giant for “internal documents and more detailed information on risks linked to the presence of illegal content and goods on its marketplace, on the transparency of its recommender systems, and on the access to data for qualified researchers”.
Per the press release, it also wants more data from Shein about “measures adopted to mitigate risks relating to consumer protection, public health and users’ wellbeing”, as well as seeking details on the protection of users’ personal data.
The Commission has given Shein until February 27 to respond to the RFI. EU enforcers will then assess its submissions to determine any next steps — which could include even more requests for info or even step up into a formal investigation proceeding.
Shein was only designated a VLOP back in April last year but EU lawmakers have said they are concerned about risks stemming from low cost ecommerce marketplaces — such as the distribution of dangerous and/or counterfeit products, or environmental harms from a flood of cheap, low quality goods.
Competition concerns posed by an influx of low quality goods into the EU single market are also preoccupying the bloc. And yesterday the Commission unboxed a strategy targeting this sweep of issues. Albeit, a lot of what was presented in the Communication on Safe and Sustainable E-Commerce is pending as it still needs to be agreed by co-legislators before it can be implemented.
Customs reforms is one plank of the strategy EU lawmakers are pushing for. However proposed changes there require Member State buy-in.
In the meanwhile, Commission officials speaking at yesterday’s press briefing were keen to point out that various existing laws already apply on low cost ecommerce platforms, from product rules to consumer protection laws and the bloc’s online governance framework.
In the latter case, enforcing relevant aspects of the DSA, which — as well as the aforementioned algorithmic transparency and accountability requirements — include restrictions on anti-consumer tactics like dark patterns — is squarely in the Commission’s gift in its role overseeing VLOPs’ compliance.
Today’s announcement of another RFI on Shein thus looks intended to keep up pressure and underscore that the bloc is already taking action. Although Commission spokespeople did not engage with our questions asking why the EU has not further stepped up enforcement in this area in light of clear concerns expressed yesterday, such as related to product safety and consumer protection.
Still, while the EU has yet to opening formal investigation proceedings on Shein (or low cost rival Temu), in spite of multiple asks for info, it has — since March last year — had a DSA probe open on another marketplace, AliExpress. That probe covers issues including risk mitigation, content moderation, ad transparency, algorithmic accountability, the traceability of traders, and data access for researchers.
Shein has been contacted for a response to the latest Commission RFI.