EU designates Shein as VLOP

Shein, a prominent fast-fashion company, faces stricter regulations after being designated as a very large online platform by the EU, signalling heightened scrutiny over its operations.

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The EU has designated Shein, a fast-fashion company founded by China, as a very large online platform (VLOP) due to its extensive user base, surpassing 45 million users. The categorisation under the EU’s Digital Services Act (DSA) imposes stricter regulations on platforms regarding online content, mandating them to take more robust measures against illegal and harmful content as well as counterfeit products.

Shein, responding to the designation, expressed its commitment to complying with the rules outlined by the EU. Leonard Lin, Shein’s global head of public affairs, emphasised the company’s dedication to ensuring consumers in the EU can confidently shop online. Shein, known for its rapid expansion and popularity, launched its marketplace in the EU in August last year and is considering a US initial public offering.

Why does it matter?

The DSA, which came into effect on 17 February, applies to all online platforms and has already been applied to several tech giants and platforms, including, Apple, Alibaba, Microsoft, and certain pornography sites. The EU has requested information from these companies regarding the steps to combat illegal content and goods sold online. Furthermore, the EU is actively investigating other platforms, such as social media platform X and ByteDance’s TikTok, with potential violations carrying fines of up to 6% of a company’s global turnover.