New EU rules target Shein’s counterfeit fashion problem

The fast-fashion company reported having more than 45 million average monthly users in the EU, earning it the “very large online platform” (VLOP) designation. The label applies to the largest technology companies such as Amazon, AliExpress, Meta and TikTok and requires them to comply with rules around content moderation and user privacy and security. In February, the EU Commission issued more general rules that apply to all but the smallest platforms.

The European Commission specifically noted new requirements for Shein around illegal products on its website. The company will have four months to submit a risk assessment report and will have to put in place mitigation measures against the “listing and sale of counterfeit goods, unsafe products and goods that infringe intellectual property rights.”

Shein, which sells its own products and acts as a marketplace for third-party sellers, has been plagued by allegations of counterfeiting and copyright infringement. Artists have accused Shein of stealing their work to create products, and brands like Oakley and Ralph Lauren have sued Shein for violating their intellectual property rights.

In response to a request for comment, Shein directed The edge to a statement from Leonard Lin, global head of public affairs, saying in part that the company “shares (is) the Commission’s ambition to ensure that consumers in the EU can shop online with peace of mind, and we are committed to playing our role.”

Other DSA requirements around transparency reports and audits could give the public a look into Shein’s business that we haven’t had in the past. Aside from allegations of counterfeit or infringing products on the platform, Shein’s supply chain has come under scrutiny, mainly around the working conditions of the people who make the $15 dresses and $3 T-shirts. Reports have found that workers were subjected to illegally long working hours and other labor abuses, and a Bloomberg investigation revealed that cotton used in some Shein products had links to the Xinjiang region of China, where U.S. officials say Uyghur forced labor takes place. Shein has said that only a small percentage of its cotton comes from Xinjiang or other “non-approved” locations.