The European Union (EU) has opened a formal investigation into Chinese online retailer Shein.
Officials said it is probing into the sale of illegal products and concerns over potentially addictive design features which falls under the EU’s Digital Services Act (DSA).
Thomas Regnier, EU Commission spokesperson said, “Today, the commission is launching a formal investigation into Shein under the Digital Services Act.”
“We suspect that the company has breached the DSA in three areas,” he said.
“First one, a highly addictive design for our consumers in the EU with rewards programmes and the gamification of the service.”
“Second, a lack of transparency on recommender systems,” Regnier said.
“Third, the sale of illegal products online,” he said.
“What are these illegal products?” he added. “This includes weapons, and this includes child sexual abuse material such as childlike sex dolls.”
Shein may be required to alter its actions or pay a hefty fine if a so-called non-compliance decision is reached following an in-depth investigation.
Companies found in violation could face fines up to 6% of their global annual revenue.
The fast fashion giant came under fire last year in France where authorities found illegal weapons including firearms, knives, and machetes, as well as childlike sex dolls for sale on its website.
Shein and its Chinese rival Timu have become the most high-profile symbols of broader concerns over the flow of cheap Chinese products into Europe.
