This is how Brussels surrounds the Chinese Shein
The European Commission has included Shein among the digital platforms subject to the obligations of the Digital Services Act. The Chinese fast fashion e-commerce will have to comply with strict rules on how it manages content on its platform starting from the end of August
The Chinese fast fashion giant ends up in the EU's sights.
The European Commission has formally designated Shein as a large online platform (VLOP) and will therefore have to comply with the more stringent rules set by the Digital Services Act (DSA) regulations within four months of its notification (by the end of August 2024).
Following today's designation, Shein will have to comply with the DSA's stricter rules within four months of notification (i.e. by the end of August 2024), such as the obligation to take specific measures to empower and protect online users, including minors, and to adequately assess and mitigate any systemic risks arising from its services.
Shein is the popular online fashion retailer founded in 2008 by Chris Xu in Nanjing China and now headquartered in Singapore. The company, which is considering an initial public offering in the US , launched its market in the EU in August last year. The platform has an average of more than 45 million monthly users in the European Union, above the DSA threshold for designation as a VLOP.
“The move to oversee the popular but controversial platform comes as Europe has tightened its control over China-based tech companies. TikTok this week suspended a feature deemed by the EU to be “addictive” and potentially in violation of the DSA,” Politico notes.
All the details
THE POSITION OF THE EUROPEAN COMMISSION
“Shein is an online fashion retailer with an average of more than 45 million monthly users in the European Union. This number of users, which Shein communicated to the Commission, exceeds the threshold established by the DSA for designation as Vlop", specifies the European Commission in a note .
To date, the EU executive specifies in the note, there are 23 online platforms (including Apple and Microsoft but also the Chinese Alibaba) and large search engines designated pursuant to the DSA.
WHAT SHEIN SHOULD DO
Specifically, Shein will diligently analyze specific systemic risks related to the dissemination of illegal content and products and the design or operation of its service and related systems. Risk assessment reports will have to be provided to the Commission four months after notification of the formal designation and once a year thereafter
The platform will also need to put in place mitigation measures to address risks, such as the listing and sale of counterfeit goods, unsafe products and items that infringe intellectual property rights.
FOCUS ON SAFETY AND CONSUMER PROTECTION
Furthermore, under the DSA Shein must also strengthen internal processes, resources, testing, documentation and supervision of all activities related to the identification of systemic risks. Measures must also be implemented to protect consumers from purchasing unsafe or illegal products, with particular attention to preventing the sale and distribution of products that could be harmful to minors. This includes incorporating robust age guarantee systems to limit the purchase of age-restricted items.
THE CHINESE RETAILER'S COMMITMENT
For its part, Chinese e-commerce has said it is committed to respecting the rules.
“We share the Commission's ambition to ensure that consumers in the EU can shop online with confidence and are committed to doing our part,” said Leonard Lin, global head of public affairs at Shein. “We also share a commitment to the principles of transparency and accountability that are at the heart of the DSA, as reflected in our supply chain governance standards and our engagement with our users.”
AT RISK OF FINE
On the other hand, penalties for non-compliance with the DSA can reach up to 6% of the global annual turnover. The maximum fine does not increase for VLOPs, but with more obligations placed on them, the level of regulatory risk they are subject to certainly increases, comments TechCrunch .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/ecco-come-bruxelles-accerchia-la-cinese-shein/ on Fri, 26 Apr 2024 13:35:50 +0000.