Chinese ecommerce and fast fashion giant Shein is facing fresh scrutiny in the European Union in relation to consumer protection rules following the launch of a coordinated action by the bloc’s Consumer Protection Cooperation Network (CPCN).
The action is being conducted with reference to the EU’s Unfair Commercial Practices Directive, Consumer Rights Directive, Unfair Contracts Terms Directive, Price Indication Directive, and e-commerce Directive — although it’s not clear what specific concerns the Network has about Shein’s marketplace.
The move was announced Wednesday by the European Commission as it simultaneously presented a package of measures and reforms aimed at tackling a slew of risks attached to a surge in low value ecommerce activity in recent years.
During a press conference announcing a Communication on E-Commerce EU lawmakers warned that a “tsunami” of cheap imports were flooding the market with products that fail to meet the bloc’s standards — creating health and safety risks for European consumers.
Unsafe products such as toys with small detachable parts that could pose a choking risk, electrical appliances with inadequate insulation, and chemicals in clothing were cited as examples of hazards linked to cheap imports.
“Recent evidence and findings of tests carried out by national authorities and consumer organizations leave us in no doubt — the evidence here is clear — up to 96% of products tested and sold on these platforms are not fully compliant with our rules and our safety standards,” said rule-of-law commissioner Michael McGrath.
The EU says some 4.6 billion “low-value consignments” (meaning goods with a value not exceeding €150) entered the market — equivalent to 12 million parcels per day — which is twice as many as in 2023 and 3x 2022.
The boom in ultra low cost ecommerce is also raising environmental and competition concerns in the EU.
Lawmakers said the bundle of issues involved necessitates a multi-pronged approach which both seeks to make use of a full range of existing laws in relevant areas — such as the EU’s Digital Services and Digital Markets Act, its General Product Safety Regulation, and Ecodesign rules — while also pushing for legislative reforms and additional rules in other areas, such as related to custom duties.
Safe and sustainable ecommerce
The Commission’s Communication sets out what’s being couched as a “A Comprehensive EU Toolbox for Safe and Sustainable E-commerce”, with the proposal spanning big ticket issues like custom reforms and targeted measures for imported goods, as well as calling for consumer protection and competition enforcement to be stepped up in this area.
(On consumer protection, it’s worth noting that while the Commission plays a coordinating role in the CPCN, actual enforcement of laws in this area falls to Member State-level authorities — so there is only so much centralized action the EU itself can do here. Hence its loud and public call for action.)
The Communication also urges adoption of the first action plan on the Ecodesign for Sustainable Products Regulation, to help respond to environmental challenges posed by the surge in ecommerce, as well as pushing for its EU co-legislators to get behind a proposed amendment to the Waste Framework Directive — which focuses on dealing with textile waste.
On Wednesday the Commission also trailed a plan to present a “digital fairness act” — which McGrath said would aim to “reinforce consumer protection in the digital sphere in a targeted manner”.
The EU has already taken some actions in this area — sending request for information to Shein and another low cost ecommerce platform Temu last June, under the Digital Services Act (DSA), after the two platforms became subject to centralized EU oversight following their designations as very large online platforms (VLOPs). (While, also like Shein, Temu is the target of consumer protection concerns: back in May consumer groups filed a series of coordinated complaints against it, accusing it of breaching the DSA.)
Since March 2024 the Commission has also had an open DSA investigation into online marketplace, AliExpress, another importer of cheap goods into the bloc. And since starting to operate the online governance framework the EU has identified ecommerce as one of its enforcement priorities — which EVP Henna Virkkunen reiterated that today.
“We will prioritize and intensify also the Commission supervisory and enforcement of the rules applicable to online marketplaces under the Digital Services Act, including the obligation to assess the risks their service poses to consumers and the measures they take to mitigate these risks,” Virkkunen said during the press briefing.
Customs reform
On reform of the EU’s customs union the bloc has had a proposal on the table since 2023 — which would eliminate the duty relief currently granted to packages with contents worth under €150.
During today’s briefing, Maroš Šefčovič, the Commissioner for Trade and Economic Security, said the proposal anticipated needs related to surging uptake of ecommerce and contained “critical measures” requiring online platforms to assume more responsibility as importers.
“The current practice of treating citizens as importers for customs purposes is ineffective in ensuring their protection,” he warned, also stressing the need for “enhancing control capacities”.
“In response to the surge of low value ecommerce imports it is critical to finalize our customs union reform and possibly front load it to 2026,” he added.
The Commission is suggesting Member States get behind “possible complementary measures”, such as a non-discriminatory handling fee for goods deliver directly to consumers. Other actions it’s floating in this area include launching a “customs priority control area” dedicated to ecommerce goods; and launching coordinated actions that aim to speedily identify and remove dangerous goods such as product safety sweeps.
Šefčovič conceded the Communication represents a “call to action”, urging EU legislators and other stakeholders to “work collectively… to ensure that every citizen benefit from a trusted online marketplace”.
Responding to the Commission proposal, BEUC, the European Consumer Organisation, pushed for “urgent and ambitious action”. “Consumer groups’ tests show that plenty of products sold online such as toys and textiles are unsafe. If the EU is serious about protecting consumers and hitting the road to decarbonisation, it must ensure everybody plays by the same rules,” said its DG, Agustín Reyna, in a statement.
“Consumer groups fully support the European Commission and national authorities launching enforcement actions, like the ongoing one we launched against Temu and the one announced today against Shein,” he added.
Shein was contacted for comment on the CPCN action. Spokesman Jakub Hera Adamowicz emailed a statement in which the company wrote: “We share the CPC Network’s goal of ensuring European consumers can shop online with peace of mind, and we intend to work closely with the CPC Network and the Commission to address any concerns.”
In wider remarks responding to the Commission’s proposed toolbox for safe and sustainable ecommerce, Shein wrote that it welcomes “efforts that enhance trust and safety for European consumers when shopping online”, and also voiced support for “a level competitive playing field”.
“Shein’s 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,” it also said, adding: “Our regulatory and compliance teams across the EU will engage our partners at EU and national government-level to study these recommendations and examine how Shein can play our part in strengthening our industry to enhance the online shopping experience for European consumers.”
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