Shein fined 40 million euros for 'misleading practices' in discount marketing
The European Commission launched an investigation into the Chinese online fashion retailer in February after accusing it of "defrauding its customers"
France has fined Shein 40 million euros after an investigation by the country's competition and anti-fraud authority found that the Chinese online giant used "misleading commercial practices towards consumers regarding price reductions" as well as failing to comply with environmental impact abatement in its production.
The nearly year-long study found that the company inflated the prices of certain products before discounting them, giving consumers "the impression that they are getting a great deal" when in fact they are not.
In particular, the report found that 11% of the discounts were "price increases", while 57% of the discounts were not offered at all and 19% of the price reductions were "less significant than advertised".
Shein has accepted the fine imposed by France and has started to implement, "without delay", the necessary corrective actions within two months of learning of the French investigation, launched in March last year.
The European Commission is also investigating Shein
The European Commission opened another investigation into Shein's practices in February this year, after determining that some of the company's approaches acted against EU laws. The European institution even accused the Chinese fashion retailer of "defrauding its customers".
Echoing the investigation of the French authorities, the European Commission focused on false discounts, in addition to highlighting other irregularities, such as false purchase deadlines that "put pressure" on customers to buy and "inaccurate and misleading" information on legal return and refund rights.
According to Brussels, Shein did not handle returns and refunds in accordance with European law; it used misleading labelling on some products, attributing to them characteristics that did not correspond to reality; provided "false or misleading" information about products' durability.
The European Commission gave Shein one month to respond and start resolving the issues, before the competent national authorities could decide on possible sanctions, following France's example.
Environmental impact
These misleading commercial practices are not the only thing that concerns European authorities. Shein is also being criticised for causing environmental pollution with its 'fast-fashion' system.
A couple of years ago, Spain's consumers' organisation (OCU) drew attention to Shein's low labour cost, low energy cost and low environmental compliance. Unlike other European fast fashion chains, which "are gradually turning towards greater sustainability", Shein "is taking giant steps in the wrong direction by encouraging the purchase of a lot of low-quality clothes that will soon end up in the bin".
However, Shein continues to state that it is "working constructively" with national authorities and the EU executive to "demonstrate its commitment to compliance with EU laws and regulations".
