Dive Brief:
- Shein has been fined 40 million euros, or about $47 million, by French regulators following an investigation by the country’s Directorate General for Competition Policy, Consumer Affairs and Fraud Control, or DGCCRF.
- The fast fashion giant misled consumers regarding price reductions and the scope of its environmental claims, the France Ministry for the Economy, Finance and Industrial and Digital Sovereignty said in a press statement Thursday.
- The investigation was conducted between Oct. 1, 2022 and Aug. 31, 2023. It analyzed prices, crossed-out prices and reduction percentages across thousands of products on Shein’s website in France.
Dive Insight:
Infinite Style E-commerce Ltd (ISEL), which is responsible for sales of Shein brand items, violated France’s regulations on price reduction announcements, the DGCCRF said in the statement.
Regulations mandate that price reductions must take into account previous promotions. Shein increased certain prices before applying a reduction, per the statement, and gave customers the impression that they’re getting good deals.
However, the investigation found that 57% of Shein's announcements offered no price reduction, while 19% offered a smaller reduction than announced and 11% were actually price increases.
Shein was informed of these breaches in March 2024. In an email, a Shein spokesperson said the company “immediately implemented corrective actions and completed them within two months,” in line with regulations from 2022 and 2023.
“This means that all identified issues were addressed more than a year ago,” the spokesperson said. “Any adjustments implemented have no impact on the final prices offered to consumers, as ensuring fashion for all remains our priority. ISEL takes its legal and regulatory obligations in France very seriously and remains committed to transparency and compliance with French regulations.”
Meanwhile, the DGCCRF also found that Shein was unable to verify the environmental claims on its website, particularly its message that the company reduced its greenhouse gas emissions by 25%, per the release.
The Shein spokesperson said that the regulation mandates mentioning the presence of plastic microfibers in products and prohibits vague claims, including claims that only refer to a single part of a product’s lifecycle.
Shein accepted the fine following an agreement with the Paris Public Prosecutor, per the release.
