EU warns fashion brand Shein over consumer law breach, threatens penalty

Shein faces EU warning over consumer law violations and potential fines, while its return to India sees poor response as app downloads drop sharply. Regulators highlight concerns over unsafe products

The European Union has warned fast-fashion brand Shein to follow EU consumer protection laws or risk facing penalties, according to a Reuters report. The warning came on Monday, May 26, as part of a broader investigation into the company's practices.

 

Back in February, the European Commission had also flagged concerns about Shein — which has rapidly expanded by offering cheap fashion products directly to customers — and another Chinese e-commerce platform, Temu, for allowing the sale of unsafe and potentially dangerous products on their websites.

 

According to the European Commission, the Consumer Protection Cooperation (CPC) Network — comprising national consumer authorities — and the Commission itself have officially notified Shein of practices that go against EU consumer law.

 

 

"Shein now has one month to reply to the CPC Network's findings and propose commitments on how they will address the identified consumer law issues. Depending on Shein's reply, the CPC Network may enter a dialogue with the company," the statement read.

 

"If Shein fails to address the concerns raised by the CPC Network, national authorities can take enforcement measures to ensure compliance. This includes the possibility to impose fines based on Shein's annual turnover in the EU member states concerned," it added.

 

Shein was yet to issue any comment on the development till the filing of this report.

Further EU action possible

In addition to these concerns, Shein could also face further obligations under the EU’s Digital Services Act — a regulation aimed at holding large online platforms more accountable.

 

The EU has also suggested introducing a €2 ($2.27) handling fee per parcel for low-value e-commerce deliveries, which could further impact Shein’s operations in Europe.

Shein struggles to make inroads in India

While Shein attempts to manage challenges in Europe, it is also facing difficulties in India. The brand re-entered the Indian market earlier this year in partnership with Mukesh Ambani and his daughter Isha Ambani, following a five-year ban by the Indian government.

 

However, Shein’s previous popularity has not returned. Data from US-based app tracking firm AppMagic shows that daily downloads of the Shein India app dropped sharply — from 50,000 in February to just 3,311 by early April.