Shein Faces EU Scrutiny Over Misleading Practices and Fake Discounts

The EU has accused fast-fashion giant Shein of employing fake discounts and misleading practices that breach consumer law, giving the company a month to respond or face fines.

The European Union (EU) has raised serious concerns regarding the business practices of fast-fashion retailer Shein, declaring that the company has engaged in deceptive activities such as fake discounts and aggressive pressure selling that violate EU consumer laws. The EU has granted Shein a month to address these findings, warning that failure to comply could lead to substantial fines based on its EU sales.

EU justice commissioner Michael McGrath emphasized the need for Shein to align its practices with EU standards, stating, "It's now for Shein to step up, respect the rules and bring its practices fully in line with EU consumer standards." In response, a spokesperson for Shein insisted that the company prioritizes providing a safe and reliable online shopping experience for European consumers.

The ongoing investigation by the EU's consumer protection authorities unveiled a series of concerning practices on Shein's site. These included misleading product information, deceptive labels, false claims about sustainability, and obscured contact details. One notable issue highlighted was the practice of artificially inflating the perceived value of products by displaying inflated "discounts" that did not reflect real prior prices. Moreover, the bloc indicated that Shein utilized fake urgency tactics to pressure customers into making rapid purchasing decisions.

The EU further insisted on ensuring that Shein's product reviews and ratings are presented transparently, without misleading consumers. McGrath reiterated the EU’s commitment to enforcing consumer rights, stating that "all companies reaching out to EU consumers must play by our rules."

In past months, Shein has attracted criticism over its labor practices. An investigation in January had revealed troubling working conditions, including reports of workers logging exhaustive hours in violation of Chinese labor regulations. This spurred claims of "willful ignorance" from UK MPs regarding the company's sourcing of cotton. In response, Shein pledged a commitment to fair labor practices and announced significant investments aimed at enhancing its governance and compliance measures across its supply chain.

Despite facing backlash, consumer interest in Shein remains robust, with some reports indicating that shoppers continue to spend on its products without hesitation, underscoring the complexities of the fast-fashion market amid scrutiny for ethical practices.