• The EU is investigating Shein for selling childlike sex dolls and potentially harmful addictive design.
• Shein has removed sex dolls globally following scrutiny from French authorities.
• Failure to comply with EU regulations could lead to significant fines or a ban.

The European Commission has opened a formal investigation into Shein, a Chinese online retailer, specifically examining the alleged sale of childlike sex dolls and the platform's "addictive design." This action was triggered by concerns raised by French authorities last November regarding the presence of products that resemble children on Shein's platform. The investigation falls under the EU's Digital Services Act (DSA), which is intended to combat illegal content and goods online. If deemed necessary, Shein could face a ban from the EU market as part of this process, according to SCMP and Le Monde.

As part of the investigation, the EU will assess Shein’s compliance with the DSA, focusing on the systems in place to limit the sale of illegal products, which includes categorically banning child sexual abuse material. Moreover, regulators will evaluate the transparency of Shein's recommender systems that generate personalized content for users. These systems allegedly contribute to the addictive nature of the platform, raising concerns about consumer wellbeing. Shein has publicly stated that it shares the commission's commitment to creating a safe online environment and will continue to engage constructively throughout this process, according to Reuters and The Local.

Following the allegations in France, Shein committed to removing the sex dolls from its platform globally and has already implemented measures to improve compliance with the DSA. The retailer has invested significantly in risk assessment tools and protocols to prevent minors from accessing age-restricted products. However, the EU's investigation suggests that there are still significant concerns regarding how well Shein manages the risks associated with its product offerings and its platform's design features that reward user engagement, which are viewed as potentially harmful. These findings echo a growing scrutiny of Chinese e-commerce platforms in Europe, as the EU intensifies its enforcement of digital regulations, according to Le Monde and The Local.

Should Shein fail to address the EU's concerns, it faces potential penalties including fines that could reach up to 6% of its global revenue. The outcome of this investigation remains uncertain as no definitive timeline has been set for its completion. Nevertheless, this probe marks a critical moment for Shein amidst broader tensions surrounding the influx of affordable Chinese goods into European markets, confirming a pattern of increased regulatory actions aimed at ensuring compliance with EU laws, according to Reuters and SCMP.