The European Commission has given fast-fashion retailer Shein one month to respond to a probe into practices its regulator believes could potentially be breaching consumer law.
Ireland’s Competition and Consumer Protection Commission (CCPC) is co-leading the investigation which has called on the online marketplace to address several issues including allegations of fake discounts, pressure selling tactics and unclear information regarding customer rights.
The CCPC said fake discounts potentially include pretending to offer better deals by showing price reductions that are not based on actual prior rates as required by EU law.
It said other issues include using false deadlines to pressure consumers to purchase, displaying incomplete or incorrect information about consumer’s rights on returns and refunds, deceptive product labels, misleading or deceptive claims about sustainability benefits, and making it difficult for consumers to contact Shein with questions or complaints.
Information has also been requested to assess the company’s compliance with further obligations including those around product rankings, ratings and reviews, and third-party sellers.
The CCPC said Shein has now one month to propose commitments on how they will address the identified consumer law issues.
The EU Commission probe is being conducted along with national consumer authorities in Belgium, France and the Netherlands.
Depending on the company’s reply, the EU consumer protection network may enter a dialogue with the retailer.
If Shein fails to address the concerns, national authorities can investigate further and may take enforcement measures to ensure compliance, which may include fines based on its annual turnover in the relevant member states.
Patrick Kenny, CCPC Commission member, said: “Consumers should be allowed to shop without being put under pressure by fake deadlines or misled by fake discounts.
“They also need clear information about how consumers can contact the company, how to return an item and receive a refund.
“In this case, the CCPC and the CPC Network have identified several practices that could mislead consumers or undermine their consumer rights.
“E-retailers and online marketplaces have a legal obligation to provide transparent and honest information about the products they sell, and consumers’ rights around returns.
The CCPC takes any breaches of the law very seriously and looks forward to constructive engagement with Shein during the course of this investigation.”
A spokesman for Shein said: “We have been working constructively with national consumers’ authorities and the EU Commission to demonstrate our commitment to complying with EU laws and regulations, and we are continuing to engage in this process to address any concerns.
“Our priority remains ensuring that European consumers can have a safe, reliable, and enjoyable online shopping experience.”
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