The Eurocentric: EU Commission Puts Shein In Hot Seat
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Consumers worldwide have enjoyed purchasing products from Shein for low prices, even if these products are known for not necessarily being of good quality. Rather than investigate them over concerns about quality, the European Commission is concerned about more nefarious aspects of the company’s website. French authorities have found concerning items for sale on the platform including weapons such as machetes and sex dolls that resemble children. The dolls measured 80 centimeters in height (30 inches) and embrace teddy bears in their arms. While they may appear innocent, the production description makes it clear it is not a toy for children. While Shein is known for its clothing it produces, it also allowed third party sellers to sell their own products on their website. Evidently, Shein was not checking whether or not the products from third party sellers are legal to sell to consumers in the European Union. For now, Shein has removed the ability of third-party sellers from its platform and is only selling its own clothing products.
While this is a step in the right direction, this is not the only concern from the European Commission regarding Shein. There are concerns regarding pressure tactics from the website including alleged discounts that are not based on actual previous prices and false time limited sales where consumers have a limited amount of time to buy products to receive an additional discount, yet every time you re-enter the site the countdown restarts. This creates a false sense of urgency for consumers to purchase while they are on the website, instead of thinking about whether they truly want or need those products.
Across the pond, Texas Attorney General Ken Paxton is also investigating Shein in connection to products that are not safe for consumers and unethical labor practices. While these investigations between the European Union and the United States may be perceived as an unfair crackdown on competition from China, in reality it is ensuring that all companies can compete on a level playing field. It is inherently more expensive for companies to sell products that ensure all products sold on their platforms are safe for consumers and legal to sell in the first place compared to companies who do not.
France’s Intensified Investigation of Shein
After it became clear that Shein was not checking whether or not items sold on its platform were safe, French authorities took drastic measures. For twenty-four hours, French authorities seized all packages which in the end numbered 200,000 packages and checked whether these packages complied with French consumer protections. French authorities claim that as a result of the checks, eighty percent of the packages did not comply. Shein’s rebuttal is simply that it is not possible to inspect that many packages within twenty hours and no evidence of what the company does to ensure packages imply or details. This casts significant doubt on Shein ensuring that it respects French and EU consumer laws, meaning its affordability partially comes from completely shirking its legal responsibility.
To the credit of the company, it volunteered to cooperate with French authorities and provide the names of customers who purchased the sex dolls that resemble children from the Shein website. Simultaneously however, these dolls should never have been sold in the first place. For this reason, it would be right for Shein’s website to be suspended from France for a three-month period as punishment. Shein profited from selling illegal products in an attempt to undercut rivals in the competition for consumers. Preventing Shein from being able to sell any products to consumers for an entire three months would force the company to realize that it will face significant economic consequences if it does not abide by national laws of EU member States along with EU legislation.
Ultimately the French court refused to allow the website to be suspended as disproportionate action. The government already confirmed it will appeal the ruling, and rightfully so. It is alarming that besides selling sex dolls that resembled children, eighty percent of goods checked during the surprise check at Charles De Gaulle airport do not comply with EU safety standards. This signals that Shein is not competing in good faith against EU retailers and maintains a competitive edge due to its failure to respect EU legislation.
It appears that the aspect of the extremely high percentage of packages failing to meet EU safety standards during the check at the airport in Paris is not included in the lawsuit, severely weaking the argument. This may also make it difficult for French authorities to win their attempt to appeal the previous verdict if this argument is not included.
In Conclusion
Shein benefits from cheaper labor costs than the European Union which already makes it easier for the company to compete. It has also sold illegal and unsafe products despite already being mandated by EU legislation to not sell these products. If Shein wants access to the European Union’s single market, the company must be held to the same standard as other competitors. If not, other competitors will struggle, allowing Shein and similar retailers to continue to gain market share while selling products that do not meet EU legislation.
This situation also shows the danger for companies who may want to include products from third party sellers in order to increase their profit. If a company is not equipped to control that all products being sold on their platform comply with safety standards in the nations where the consumers are located, a lengthy legal process with potential severe penalties may await them.
