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The European Union is going after Shein, accusing it of deceiving customers with fake discounts and misleading information.
The European Commission said in a Monday statement it had investigated the Chinese fast-fashion company, along with other consumer rights watchdogs in Belgium, France, Ireland, and the Netherlands.
According to the statement, the investigation revealed that Shein had engaged in multiple practices “in breach of EU law.” These included offering fake discounts, pressuring customers to buy products with false purchase deadlines, using deceptive product labels, making misleading sustainability claims, and hiding contact details of customer service agents from customers.
It also said Shein was feeding customers incorrect and misleading information about product returns and refunds, and failing to process refunds.
Shein now has a month, until June 26, to respond to the investigation findings and show how it would address the problems, per the statement. If action is not taken in a month, the EU could fine the company.
Representatives for the European Commission did not respond to BI’s query on how much Shein could be fined for noncompliance. Representatives for Shein did not respond to a request for comment from Business Insider.
Shein has a large presence in the EU, with an average of 100 million users engaging with its platform in the region monthly, per its website.
This is the latest blow to Shein after a tumultuous few months for the company. It was directly affected by President Donald Trump’s tariffs, particularly his administration’s closing of the de minimis loophole, which allowed small parcels under $800 to enter the US for free.
Shein increased the prices of its products on April 25, citing “recent changes in global trade rules and tariffs.” Its sales growth has dropped significantly.
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