Fast Fashion Shop Shein Set To Face EU Scrutiny Under Digital Content Rules

(Bloomberg) -- Fast-fashion firm Shein is set to be swept up by European Union rules designed to clamp down on illegal and harmful content online, in a sign that regulators are paying closer attention to the ecommerce giant.

The company, founded in China and popular with shoppers around the world, will soon be designated under the EU’s Digital Services Act, according to people familiar with the matter. The rules require online marketplaces like Shein to trace the sellers on their platform, add methods for customers to flag illegal content and randomly test for illegal products.

The move means Shein could be liable to fines of as much as 6% of global revenue for violating the rules, designed to curtail the spread of illegal content online. 

Platforms already drawn under the DSA include Alphabet Inc.’s YouTube, Meta Platforms Inc.’s Facebook, and Elon Musk’s X. Other marketplaces like Alibaba Group Holding Ltd.’s AliExpress and Amazon.com Inc.’s platform have also been designated, having met the criteria of having at least 45 million monthly active users in the bloc.  

The DSA, which went into effect in August, gives European regulators unprecedented powers to hold major tech companies accountable for the content on their platforms. The rules include restrictions on using sensitive data such as race or religion for ad targeting, a ban on targeting ads to minors and a block on tactics that push people into consenting to online tracking.

“We are in regular and constructive dialogue with the European Commission to ensure continued compliance with EU laws and regulations,” Shein said. 

The Brussels-based didn’t commission immediately responded to a request for comment. 

Read more: Shein’s Cotton Tied to Chinese Region Accused of Forced Labor

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