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Shein faces tougher EU regulations (such as limiting sale of counterfeits) after being deemed a "very large online platform"


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Shein, the online fast-fashion retailer, is now subject to the European Union’s most rigorous digital regulations. This move comes as the EU’s Executive Commission formally classifies Shein as a “very large online platform” under the bloc’s Digital Services Act. This designation is a consequence of Shein’s meteoric rise in the West, where it has captivated younger women with its low-cost apparel and household items.

 

The Chinese-founded company, now based in Singapore, primarily reaches its customers through its app. With more than 45 million European users, Shein is now obligated to adhere to the most stringent requirements by August. These include taking specific measures to protect online users and assessing and mitigating any “systemic risks” from their services, such as limiting the sale of illegal or counterfeit products.

 

Shein’s obligations also extend to adjusting its user interfaces and recommendation algorithms to ensure consumer safety and well-being. Furthermore, the company is required to file annual risk assessment reports evaluating potential harm to consumers, especially children.

 

This development places Shein alongside 22 tech giants, including Facebook, TikTok, YouTube, Instagram, Amazon, and Google Search, which have been subject to the toughest tier of supervision since the Digital Services Act took effect last year. Violations of these regulations could result in fines of up to 6% of a company’s annual worldwide revenue.

 

How will these stringent regulations reshape the landscape of online fast-fashion retailing? Will other online retailers follow suit? We invite you to share your thoughts on this topic.

 

 

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Image: Timon Schneider | Dreamstime.com

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