BRUSSELS, Feb 17 (Reuters) – The EU opened a formal investigation into Chinese online retailer Shein on Tuesday over sales of illegal products and concerns over the platform’s potentially addictive design, intensifying scrutiny under the bloc’s strict Digital Services Law.
The law-based measure requiring online platforms to do more to combat illegal and harmful content came after France urged the EU’s executive body in November to crack down on the sale of child-like sex dolls on Shein’s platform.
Shein has since stopped selling all sex dolls worldwide.
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The company and its Chinese rival Temu have become the most notorious symbols of broader concerns about the flow of cheap Chinese goods to Europe.
“The Digital Services Act keeps consumers safe, protects their well-being and empowers them with information about the algorithms they are interacting with. We will assess whether Shein is respecting these rules and its responsibility,” EU technology chief Henna Virkkunen said in a statement.
The Commission signaled the possibility of an EU investigation last month.
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ADDITIONAL SAFETY MEASURES
Shein said it will continue to cooperate with the EU regulator and has invested significantly in measures to strengthen compliance with EU legislation, including carrying out systemic risk assessments and mitigation frameworks, and strengthening the protection of younger users.
“In addition to improving detection tools, we have also accelerated the implementation of additional safeguards around age-restricted products,” the company said, including age verification measures to prevent minors from viewing or purchasing age-restricted content or products.
The European Commission said it would investigate the systems Shein has put in place in the EU to limit the sale of illegal products, including possible child sexual abuse materials.
The investigation will also focus on Shein’s addictive design, including the awarding of points or rewards for engagement, which can have a negative impact on users’ well-being.
The transparency of the recommendation systems that Shein uses to propose content and products to users will also be subject to scrutiny by the EU.
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