The European Commission has added the Chinese fast fashion brand Shein to the list of “very large online platforms” (VLOP), under the Digital Services Act (DSA). Like all online platforms, Shein must comply with the general obligations of the DSA since February 17. But with this new designation, the platform will be subject to increased control by the European Union, in particular on the dissemination of illegal content or products and on the protection of minors.
Shein has four months to comply with strengthened rules
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“Following today's designation as a VLOP, Shein will be required to comply with the stricter rules under the Digital Services Regulation within four months of its notification, i.e. by the end of August 2024”, specified the European Commission in its press release of April 26. Founded in 2012, Shein claims 108 million monthly users in the EU, well above the threshold of 45 million at which digital platforms can be subject to this enhanced control.
With this new designation, Shein will have to analyze the risks linked to the dissemination of illicit content or products, and implement means of mitigating the risks. Measures that can involve better design of the user interface to better detect lists of counterfeit or dangerous products, more advanced moderation processes and improvement of its algorithms. The fast fashion platform will have to submit a report to the European Commission in August, then another report each year.
“We are committed to playing our role”
In order to protect consumers, Shein will have to “structure your platform, including user interfaces, recommendation algorithms and terms of use”. The European Commission insists on “preventing the sale and distribution of products likely to harm minors”by integrating “solid age insurance” of the user.
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Leonard Lin, head of public affairs at Shein, said: “We share the Commission's ambition to ensure that EU consumers can shop online with peace of mind, and we are committed to playing our part”. Of which act. In the event of non-compliance with these reinforced rules, the platform could be fined up to 6% of its annual global turnover, or even banned in Europe in the event of a repeat offense. In 2022, the firm, which is headquartered in Singapore, had achieved global sales of $22.7 billion.
The application founded in 2012 thus becomes the 23e platform to be subject to this reinforced control, alongside tech giants like Google (Search, Play, Maps, Shopping), Facebook and Instagram, TikTok, Apple or X (formerly Twitter). AliExpress, a Chinese company also offering low-cost clothing, has been on this list since April 25, 2023.
Europe is keeping a watchful eye
Last September, the European Union court suspended the classification of Amazon Store as a “very large platform”, to the extent that the latter would be obliged to make an advertising register available to the public. The European Commission appealed to the Court of Justice of the European Union against this decision, and the dispute is still ongoing.
The European Commission also issued several warnings this month against the social network TikTok, concerning its new TikTok Lite application, rewarding users for time spent in front of screens. She considered that this mechanism posed “serious risks to the mental health of users” and that TikTok was required to provide, in accordance with its obligations under the DSA, a risk assessment. Even before sending this evaluation, TikTok announced on Wednesday the suspension “voluntary” of the new functionality.
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