THE European Union on Friday (Apr 26) added Chinese-founded online retailer Shein to its list of digital companies that are large enough to come under stricter safety curbs.
The company joins Facebook, TikTok, X, YouTube in a list of 23 “very large online platforms”, which have more than 45 million monthly active users in the European Union.
From the end of August, four months after the designation, Shein will have to apply the tougher rules under the Digital Services Act (DSA), one of the EU’s landmark new laws against online platforms.
These include implementing measures to “protect consumers from purchasing unsafe or illegal goods, with particular focus on preventing the sale and distribution of products that could be harmful to minors”, the European Commission said.
Shein has said it has around 108 million monthly active users in the 27-nation EU.
Beyond the EU, Shein has faced fierce criticism with a long litany of accusations from alleged exploitation of its factory workers with low pay to promoting hyperconsumerism to causing damage to the environment.
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Brussels has flexed its legal muscle against the world’s biggest digital platforms, launching investigations against TikTok, X and Chinese retailer AliExpress.
Another Chinese shopping app, Temu, is expected to be added to the EU’s list after announcing in April that it has around 75 million monthly active users after entering the EU market a year ago.
Under the DSA, the platforms must assess the specific risks posed to Europeans’ rights and safety by the content they publish – or the products on sale in the case of online marketplaces like Amazon and Shein – and to submit a report to regulators.
They must also provide, at their own expense, an external audit once a year to verify they comply with the rules.
The largest platforms are also subject to increased transparency, with the obligation to provide access to their data to researchers approved by Brussels.
Taking on Chinese tech
Shein is not the only Chinese platform in the EU’s crosshairs.
Popular video sharing app TikTok, owned by China’s ByteDance, has faced the intense scrutiny in the EU – and beyond.
While it faces a ban in the US, TikTok is the subject of two investigations by the European Commission over alleged harm to minors.
On Wednesday, TikTok suspended its reward programme on its spinoff Lite app after the commission started a probe into its possible addictive features.
Brussels has also not shied away from wielding its trade weapons against China despite angering Beijing, which accuses the EU of protectionism.
On Wednesday, the EU announced a probe into China’s medical device market as Brussels takes on Beijing over green tech subsidies suspected of undermining fair competition.
That follows other investigations in the past few months into Chinese wind turbine suppliers, solar panel manufacturers, trains and electric car subsidies. AFP
