The EU Commission has opened formal proceedings against e-commerce platform Shein for its addictive design, lack of transparency of recommender systems, and also the sale of illegal products, including child sexual abuse material.
Specifically, the investigation will focus on the following areas:
- The systems Shein has in place to limit the sale of illegal products in the EU, including content which could constitute child sexual abuse material, such as child-like sex dolls.
- The risks linked to the addictive design of the service, including giving consumers points or rewards for engagement, as well as the systems Shein has in place to mitigate such risks. Addictive features could have a negative impact on users’ wellbeing and consumer protection online.
- The transparency of the recommender systems that Shein uses to propose content and products to users. Under the DSA, Shein must disclose the main parameters used in its recommender systems and it must provide users with at least one easily accessible option that is not based on profiling for each recommender system.
“In the EU, illegal products are prohibited – whether they are on a store shelf or on an online marketplace,” said EC executive vice-president Henna Virkkunen: “The Digital Services Act keeps shoppers safe, protects their wellbeing and empowers them with information about the algorithms they are interacting with. We will assess whether Shein is respecting these rules and their responsibility.”
The Commission will now carry out an in-depth investigation as a matter of priority. The opening of formal proceedings does not prejudge the outcome.
After the formal opening of proceedings, the Commission will continue to gather evidence, for example by sending additional requests for information to Shein or third parties or conducting monitoring actions or interviews.
The opening of formal proceedings empowers the Commission to take further enforcement steps, including interim measures or the adoption of a non-compliance decision. The Commission is also empowered to accept commitments made by Shein to remedy matters subject to the proceeding.
The DSA does not set any legal deadline for bringing formal proceedings to an end. The duration of an in-depth investigation depends on several factors, including the complexity of the case, the extent to which the company concerned cooperates with the Commission and the exercise of the rights of defense. Moreover, the opening of formal proceedings does not prejudge its outcome or any other proceedings that the Commission may decide to initiate under other articles of the DSA.
