Shein fined record 40 million euros for "deceptive commercial practices"

Chinese fast-fashion giant Shein has been fined €40 million for "deceptive commercial practices" following an investigation by the French Directorate General for Competition, Consumer Affairs and Fraud Control (DGCCRF), the department of the Ministry of the Economy announced on Thursday, July 3.

The investigation by the anti-fraud department reveals in particular "the implementation" by the company Infinite Style E-commerce LTD (ISEL), responsible for sales of Shein products , of "deceptive commercial practices towards consumers regarding the reality of the price reductions granted" , the DGCCRF announced in a press release.

The fine was "proposed" with "the agreement of the Paris public prosecutor" and "following a settlement procedure," the DGCCRF specifies. This is a record amount for this type of offense. Specifically, Shein is accused of increasing "certain prices before applying a reduction," or of not having taken into account "previous promotions" when indicating a reference price.

"These practices of a profusion of crossed-out prices and permanent promotions give consumers the impression of getting a very good deal," explains the DGCCRF. However, it noted that "57% of the advertisements checked" during the investigation offered "no price reduction, 19% a reduction less significant than announced and 11% were in reality price increases."

To conduct its investigation, the French fraud squad explains that it noted on the Shein website "the prices of several thousand products (sale prices, crossed-out prices and percentage reduction)" between October 2022 and August 2023. Another act denounced: "deceptive commercial practices" on "the scope of commitments concerning environmental claims" of the Shein brand .

The Chinese group claims to have "immediately implemented the necessary corrective actions, completed within two months" after being notified by the DGCCRF "in March 2024" . "All the points raised" by the DGCCRF investigation "have therefore been addressed for more than a year" , the company states, specifying that "these adjustments have had no impact on the final prices offered to consumers" .

Shein also assures that ISEL takes "its legal and regulatory obligations in France very seriously" and remains "fully committed to transparency and compliance with French regulations." For its part, the DGCCRF indicates that it "maintains its vigilance on the evolution of practices observed following these investigations."