Shein faces EU investigation over illegal products and addictive design features

"LONDON -- European Union regulators are investigating Shein over concerns the online retailer hasn't done enough to limit the sale of illegal products or protect users from the platform's allegedly addictive design. The 27-nation bloc's executive arm said Tuesday that it opened formal investigation under the bloc's sweeping rulebook known as the Digital Services Act, which requires the biggest online platforms to take extra steps to protect internet users from dodgy products."

"The commission says it will also determine whether Shein has systems to mitigate risks related to what it says is the platform's addictive design, which includes giving users points or rewards "for engagement." And regulators are also targeting the transparency of Shein's recommendation systems that suggest more products to consumers. They're concerned that the company doesn't clearly explain to users why they're being recommended specific products."

The European Commission opened a formal investigation under the Digital Services Act into Shein for potentially failing to limit illegal product sales and for an allegedly addictive platform design. The investigation could result in required changes or significant fines if non-compliance is found. Investigators will examine safeguards to prevent sale of items illegal in the EU, including items that may amount to child sexual abuse material such as child-like sex dolls. The probe follows French findings of illegal weapons and child-like sex dolls on Shein and a court referral. Regulators will also assess engagement-driven incentives and recommendation transparency. Shein said it takes its obligations seriously.

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