The European Union (EU) has added Chinese online marketplace Shein to the list of digital companies large enough to require stricter controls and security restrictions.
This list includes 23 “very large online platforms,” including Facebook, TikTok, X and YouTube, which have more than 45 million monthly active users in the European Union.
From the end of August, China's Shein will have to implement stricter rules under the Digital Services (DSA), a relatively new EU law against online platforms.
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The regulations include implementing measures to “protect consumers from purchasing unsafe or illegal goods, with a particular focus on preventing the sale and distribution of products that could be harmful to minors,” the European Commission said.
Shein has been very popular for the past three years or so and says it has around 108 million monthly active users across the 27 EU countries.
The company has been accused of various things over this time, from allegedly exploiting employees to promoting overconsumption and causing harm to the environment.
Possible EU concerns regarding Shein
One of the European Union's main concerns about Shein may be consumer data protection . The EU wants to ensure that users ' information is not used illegally or abusively.
In addition, the EU is concerned about compliance with competition rules. Shein, as one of the largest digital companies, could exploit its position to exclude its competitors.
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The European Union now wants to look into various aspects of Shein, having already targeted some of the world’s biggest digital platforms , launching investigations into TikTok, X and Chinese retailer AliExpress . The equally popular app Temu is also expected to be added to the EU list after announcing it has around 75 million monthly active users in Europe.
Under the DSA, platforms must assess the risks of their content to the rights and safety of Europeans. In addition, products sold by online marketplaces, such as Amazon and Shein, must be checked and reported to regulators.
They must also undergo an external audit once a year to verify that they are complying with the rules.
The European Union targets Chinese apps
Shein is not the only Chinese platform in the EU's sights. The popular video-sharing app TikTok, owned by China's ByteDance, is also being tightly controlled.
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See also: Apple fined €1.84 billion for violating competition laws
While facing a potential ban in the US, TikTok is the subject of two investigations by the European Commission for alleged harm to minors.
Also on Wednesday, TikTok suspended the rewards program on its spinoff app TikTok Liteafter the commission launched an investigation into its potentially addictive features.
Source: www.businesstimes.com.sg
