Due Diligence: Shein handed a €40m fine

E-commerce platform Shein fined €40m for misleading discounts and sustainability claims; EU authorities intensify enforcement on consumer protection and illegal subcontracting practices, led by Italy

The Key Points SHEIN, the global e-commerce platform, was fined €40 million by the French Competition Authority for misleading discount practices and unsubstantiated claims regarding business and environmental responsibility. Investigations are ongoing in Italy, and the European Commission has also raised concerns about SHEIN’s compliance with EU consumer law, including issues such as fake discounts, pressure selling, and misleading sustainability claims. The Commission is also examining SHEIN under the Digital Services Act, focusing on consumer protection and data processing. Other brands, including Decathlon, H&M, Giorgio Armani, and Christian Dior, have faced similar scrutiny in recent years.

Why This Matters  This wave of enforcement signals a shift in how European authorities are addressing misleading commercial practices and sustainability claims. The increased focus on ultra-fast fashion and the on-demand economy highlights the challenges regulators face in keeping pace with evolving business models and supply chains. The actions against SHEIN and other brands underscore the growing importance of transparency and accountability in both consumer protection and environmental claims.

What Might Happen Next  With the deadline for SHEIN to respond to the European Commission’s concerns now passed, further enforcement actions and potentially significant fines could follow. The Italian Competition Authority is expected to announce its findings soon. The broader trend suggests that more companies may come under similar scrutiny as authorities intensify efforts to address misleading practices and improve supply chain transparency.

What You Should Be Doing  Companies operating in the EU, especially in fast-moving consumer sectors, should review their discounting practices, sustainability claims, and supply chain transparency. It is essential to ensure compliance with both national and EU consumer protection laws, as well as the Digital Services Act. Proactive due diligence and clear, substantiated communications about business and environmental practices are now more important than ever.