Shein’s Marketplace Reportedly Facing EU Investigation

Shein is reportedly facing a probe in Europe over its compliance with consumer laws.

The investigation by the European Commission (EC) will look at whether the Chinese company is selling illegal products and could result in fines, Bloomberg News reported Monday (Feb. 3), citing sources familiar with the matter.

The Bloomberg report notes that the EC is increasingly employing a mechanism called the Consumer Protection Cooperation Network, designed to unify national authorities against major online platforms suspected of violating consumer protection rules.

Temu, Shein’s eCommerce rival, has faced similar actions, as has Apple. Companies found to have violated the law can be subject to fines from regulations in individual European Union states.

A spokesperson for Shein told PYMNTS the company intends to work with regulators to address concerns.

“Our on-demand model aims to reduce inefficiency and lowers waste on material and unsold inventory, allowing us to offer great style and quality at accessible prices,” they said. “Regulatory compliance is a cornerstone of our business strategy, and we have built teams in Europe and around the globe focused on key areas such as product safety, customs, and tax compliance.”

The EC is expected to introduced a new strategy this week designed to crack down on eCommerce platforms being used to ship unsafe goods from China and other countries outside the EU, the report adds.

Meanwhile, Shein is facing pressure from the U.S. as President Donald Trump prepares to impose tariffs on goods from China, Mexico and Canada.

As noted here this weekend, the tariffs will include a provision that will eliminate a longstanding rule that allows small packages to come into the U.S. without paying a tariff.

This rule — known as the “de minimis” exemption for packages worth less than $800 — is commonly used by Chinese eCommerce retailers to sell goods at lower prices by shipping them directly to consumers, and could affect companies like Shein.

Former President Joe Biden in September had called for rules targeting the de minimis exemption. The White House said at the time that the trade rules had been abused by China-founded eCommerce platforms and that the number of shipments claiming the exemption had jumped from 140 million a year to over 1 billion a year in the past decade.

Shein is also preparing to go public in the U.K. As reported here last month, the company plans to launch its initial public offering (IPO) in London by the middle of the year, possibly as early as April, per a Reuters report.

Shein called off its efforts to go public in the U.S. following opposition from lawmakers worried about the company’s ties to China, and alleged human rights violations in its supply chain.