Why Is Shein Being Investigated by the EU?

Many shoppers are wondering, “Is Shein breaking the law with fake discounts?” The European Union (EU) says yes. Shein, a global leader in fast fashion, has been accused of violating EU consumer protection laws by showing “fake discounts” that don’t reflect a product’s true price history. According to a recent investigation by the EU’s Consumer Protection Cooperation (CPC) Network, Shein also pressures shoppers with misleading countdowns and deceptive product labeling. If you’ve noticed price drops that seem too good to be true or sustainability claims that feel off, you’re not alone—and now the EU is taking action.

What Are the EU’s Specific Allegations?

The CPC found that Shein uses deceptive tactics such as displaying inflated “before” prices and falsely labeling items with so-called special characteristics. For instance, a product might claim to have a certain quality or feature when it’s actually a legal requirement rather than a bonus.  

How Does This Impact Shoppers?

For consumers, these practices mean being lured into purchases that might not offer genuine savings or real product advantages. The investigation also revealed that Shein provides incomplete or incorrect information about return rights and refunds—critical consumer rights in the e-commerce space. On top of that, Shein’s contact information has been found to be hidden or hard to locate, creating barriers to customer service and dispute resolution.

What’s at Stake for Shein?

Under the Digital Services Act (DSA), Shein—designated as a “very large online platform”—must comply with strict rules on transparency, product labeling, and removal of illegal goods or content. Failure to address these violations could result in fines of up to 6% of Shein’s global turnover, a severe financial blow given its massive global footprint. The EU has given Shein a one-month deadline to align with regulations or face consequences.

Is Shein Facing Challenges Outside the EU?

Shein’s legal troubles aren’t confined to Europe. In the United States, it recently raised prices in response to trade policy changes under President Trump, including tariffs and the removal of duty-free status for low-cost imports from China. Combined with consumer protection concerns, these issues could reshape Shein’s reputation and operational strategy on a global scale.

What Happens Next?

Shein has been asked to explain how it ensures compliance with laws against misleading product rankings, reviews, and ratings, a hot-button issue in online retail. The company has just one month to respond to the EU’s demands. If you’re a Shein shopper, it’s worth keeping an eye on these developments—especially as regulatory scrutiny grows around deceptive sales practices, e-commerce compliance fines, and sustainable fashion claims.

Why This Matters for Online Shoppers and Marketers

The Shein case highlights the growing importance of transparency, ethical online marketing, and consumer protection in e-commerce. With increasing scrutiny from regulators, online retailers must ensure that price reductions, sustainability claims, and product descriptions are honest and verifiable.