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Brussels has opened a formal investigation into China-founded fast-fashion retailer Shein for breaching the bloc’s rules on digital platforms, including the sale of illegal products such as childlike sex dolls.
The European Commission said the Singapore-based company was being probed under its Digital Services Act (DSA) for its “addictive design, the lack of transparency of recommender systems, as well as the sale of illegal products, including child sexual abuse material”.
The move comes amid intensified application of the EU’s landmark digital rules, particularly focusing on US and Chinese platforms. Brussels is also taking various steps to police billions of low-priced goods sent to the bloc from China each year that officials say pose a danger to consumers.
Brussels said the DSA investigation would focus on illegal products, “the risks linked to the addictive design” of Shein’s platform and “transparency of the recommender systems that Shein uses to propose content and products to users”.
“The Commission will now carry out an in-depth investigation as a matter of priority,” it said. Breaches of the DSA can result in fines of up to 6 per cent of total global annual turnover.
Shein said in a statement that it was already responding to issues raised by Brussels and had “always co-operated fully with the European Commission, as we will continue to do in this process. Over the last few months, we have continued to invest significantly in measures to strengthen our compliance with the DSA”.
Henna Virkkunen, the bloc’s executive vice-president, said illegal products were prohibited in the EU “whether they are on a store shelf or on an online marketplace”.
The move comes after Brussels found in July 2025 that rival Chinese ecommerce group Temu had breached the DSA by failing to do enough to prevent the sale of illegal products on its platform.
Separately, the EU is fast-tracking the imposition of new fees on small packages ordered online from platforms such as Shein, in a bid to crack down on billions of cheap Chinese products sent to the bloc each year.
Shein was fined a record €40mn by French regulators last July for misleading consumers on price reductions and environmental commitments.
Most of Shein’s suppliers are based in China, with many in the manufacturing hub of Guangzhou.
The company uses algorithms to scour the web for popular designs, feeding them to suppliers via ultra-small orders and only requesting more when it is certain there will be demand. The model allows Shein to offer millions of designs at any one time, compared with tens of thousands at other mass-market retailers.
Western retailers argue that the company has exploited tariff exemptions on small packages and postal subsidies to keep prices low.
Pushback on those exemptions and concerns over suppliers’ labour practices in overseas markets have complicated Shein’s efforts to list on a stock market, with some investors pushing for it to seek a significantly lower valuation.
UK ministers have been trying to convince Shein to choose the London Stock Exchange for its listing.
On Monday, the UK accounting regulator said it was considering changes to strict auditing rules to encourage more Chinese companies to list in London in response to a government push to revive the City’s flagging stock market.