Shein Fined 40 Million Euros for Fake Discounts by French Competition Authority
The ultra-fast fashion giant has been fined a record 40 million euros by the France's anti-trust authority, the French Directorate General for Competition, Consumer Affairs and Fraud (DGCCRF).
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The authority claimed that the Singapore-based Chinese brand's pricing practices were deceptive, offering customers 'discounts' which didn't exist.
The DGCCRF alleged that Shein would raise prices before lowering them to appear as if they were giving customers a good deal.
It follows a nearly year-long investigation by the DGCCRF which found that Shein had misled customers between October 2022 and August 2023. The authority found that 57 percent of Shein promotions did not represent a lower price; 19 percent offered discounts smaller than advertised, and 11 percent were price increases disguised as sales.
The findings are based on French regulations that require any advertised discount must reference the lowest price offered by the seller in the previous 30 days. Investigators found that Shein repeatedly broke this rule, inflating original prices before applying discounts or referencing prices that were not valid.
In a statement to Agence France Presse, the company said that its French subsidiary, Infinite Style E-commerce Limited (ISEL), had been notified of the violations in March 2023, and taken corrective measures within two months.
'This means that all identified issues were addressed more than a year ago,' the company said, emphasizing its commitment to regulatory compliance in France.
Shein has been under scrutiny in France. In June, the French Senate passed a bill targeting Shein and other 'ultra-fast fashion' players, including Temu, by proposing a tax on small parcels shipped from outside the European Union ranging from 2 to 4 euros per package. The fee is intended to slow the influx of packages from Chinese platforms to France.
In 2024, Shein and Temu together shipped 800 million packages to France — more than half of all parcels sent to the country.
A few days later, Shein executive chair Donald Tang took to the stage at Paris' VivaTech conference to defend the company's business model. During his appearance, he said Shein is 'not fast fashion;' instead it is 'fashion-on-demand' and only produces what the market wants.
The bill needs to be validated by the EU, then will return to the Assembly where a stronger version passed in 2024, for a reconciliation process and final vote. That is expected to take place around October.
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