Chinese online fashion giant Shein gets into a 'number problem' in Europe

Popular fast-fashion retailer Shein , founded in China, has reportedly been swept up in the EU's new online content regulations due to its booming user base in Europe. The European Commission announced this on Friday, adding Shein to the growing list of tech giants subject to the Digital Services Act (DSA). According to a report in Reuters, "Chinese-founded fast-fashion company Shein will have to comply with tough new EU online content rules after its user numbers soared above a key benchmark, joining a score of other Big Tech companies already subject to the rules, the European Commission said on Friday (April 26)."

The DSA requires stricter content moderation from "very large online platforms" (VLOPs) with over 45 million monthly active users in the EU. Shein, with its recent surge to 108 million monthly users in the bloc, now falls under this category.

Rules go tough for Shein
"Shein will have to comply with the most stringent aspects of the DSA within four months," stated the EU Commission, giving the company a deadline of August 2024. These stricter obligations include enhanced user protection measures, particularly for minors, and robust strategies to tackle illegal content and counterfeit products on their platform.

Shein expressed commitment to complying with the regulations. "We support the EU's goal of creating a safe online shopping environment and are dedicated to playing our part," said Leonard Lin, Shein's global head of public affairs.

This move comes as Shein eyes a potential IPO in the US. The DSA itself became enforceable across the EU in February 2024. Currently, sixteen tech firms, including major players like Amazon, Apple, and Microsoft, are already subject to the DSA. Notably, the EU is also investigating social media platforms X and TikTok for potential violations.

Companies found to be non-compliant with the DSA could face significant fines up to 6% of their global revenue.