France fines Shein 40 million euros over ‘deceptive’ sales practices

A page from the Shein website is shown in this photo, in New York on June 23, 2023. (AP Photo/Richard Drew)

PARIS, France — France announced Thursday a record 40 million-euro fine against e-commerce giant Shein over “deceptive commercial practices” after a competition inquiry, saying it misled customers on price deals and on its environmental impact.

The French competition and anti-fraud office said the investigation found Shein used “deceptive commercial practices towards consumers regarding... price reductions”, with the fine handed down with the blessing of the Paris prosecutor’s office.

The DGCCRF competition office said the nearly year-long probe found that the firm raised certain prices before lowering them.

It added that the China-founded retailer had accepted the fine.

“These practices of greatly discounted prices and permanent promotions give consumers the impression they’re getting a great deal,” said the DGCCRF.

If found that 11 percent of advertised discounts it checked “were actually price increases”.

In 57 percent of cases Shein’s advertised promotions actually offered “no price reduction” and in 19 percent of cases the price drop “less significant than announced”.

Launched in France in 2015, Shein has seen phenomenal growth in recent years and took its share in the domestic clothing and footwear last year to three percent from two in 2021 -- a significant slice in what is a notably fragmented market.

The company, which has become a figurehead for the downside of “ultrafast fashion,” is decried in some quarters for causing environmental pollution as well as indulging in unfair competition and allowing poor working conditions.

In a statement to AFP, Shein said it had put into action “without delay” necessary corrective action inside two months on learning of the DGCCRF probe against in March of last year.

It added it took its legal and regulatory obligations in France “very seriously” and was committed to transparency.

AFP