Shein faces strictest EU regulations as officials crack down on mega-marketplaces

Shein (over)haul… The world's biggest fast-fashion brand is facing fresh scrutiny. Shein was officially labeled a "very large online platform," or VLOP, under the EU’s Digital Services Act. Passed in 2022, it was designed to clamp down on illegal online content from companies with 45M+ monthly users (Shein said 108M Europeans visit its app each month). Now it’ll have to comply with the DSA’s strictest regulations, including against knockoffs and items that violate IP rights. The Chinese ecomm behemoth has faced IP-theft accusations from companies and indie designers.

• New rules: Starting in August, Shein will have to follow the EU rules or risk fines of up to 6% of its annual revenue (estimated to be more than that of H&M and Abercrombie combined).

• Bad dupe: Shein was given four months to address potentially illegal products on its site after facing copyright-infringement lawsuits from the likes of Ralph Lauren, Uniqlo, and Oakley.

From VIP to VLOP… While the EU’s "very large online platform" status has largely been tied to big techies like Meta, TikTok, and Google, ecomm titans are also getting attention. Shein joins 20+ other retailers under the EU’s VLOP watch, including Amazon and AliExpress. Experts say required transparency reports and audits could shed light on Shein's biz practices.

• Audit pending: US lawmakers have urged the SEC to pause Shein’s IPO till it can prove it doesn’t use forced labor to make its clothes. Shein has said it has “zero tolerance for forced labor.”