Latest news with #DGCCRF
Yahoo
7 days ago
- Business
- Yahoo
Shein Fined 40 Million Euros for Fake Discounts by French Competition Authority
PARIS – France is continuing to take aim at Shein, this time from another angle. 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). More from WWD Nouvel Héritage Marks 10-year Anniversary With Debut High Jewelry Collection Maison&Objet's Managing Director Mélanie Leroy Resigns Shein's Donald Tang Makes His Case in France, as Company's Sustainability Report Shows Rising Emissions 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. Best of WWD Pandemic Has Stoked Appetite for French Luxury, Survey Finds U.S. Sets Strategic Vision for China Trade Policy Furmark's Farm-to-Shopfloor Tracing Tags Set for International Debut Solve the daily Crossword
Fashion United
11-07-2025
- Business
- Fashion United
Shein slapped with high fines in California, France
Chinese ultra-fast fashion giant Shein needs to have deep pockets these days, given that the global e-commerce company is being slapped with fines in two countries at the moment. Shein just settled a consumer protection lawsuit in the United States, in California's Napa, Los Angeles, San Francisco and Sonoma counties, and agreed to pay 700,000 US dollars (almost 600,000 euros) in civil penalties and investigative costs. Shipping delays cost Shein dearly in California The complaint alleges, among other things, that Shein 'engaged in unlawful business practices by failing to properly notify customers or offer them refunds when their orders were not shipped on time'. California law requires that orders placed over the internet must be shipped within 30 days – sooner if the company promises expedited shipping or later if a longer shipping time is indicated. If a company fails to ship products within 30 days, it must take steps such as sending a notice informing consumers of the expected length of delay and offers refund opportunities for a refund. According to the complaint, Shein 'repeatedly failed to ship products within the required timeframes, provide the required delay notices or offer refunds to its customers'. 'California consumers deserve to have the products they pay for delivered in a timely manner and Shein repeatedly violated that trust by failing to offer refunds when they could not deliver on time. Our office is proud to join the District Attorneys of Sonoma, Los Angeles and San Francisco to hold Shein accountable for their illegal business practices,' commented district attorney Allison Haley in a press release on Wednesday. As part of the judgment, Shein is also prohibited from 'making untrue or misleading statements about the time it takes to ship or deliver products and from violating laws related to the shipping delays'. In a statement made on Thursday, a Shein spokesperson confirmed that the company had taken steps 'to ensure our shipping and customer practices and communications comply with applicable law, including enhancing our internal processes to provide clearer, more complete information to customers regarding delivery timelines,' however, not admitting any liability. Million-dollar fines in France Compared to two fines amounting to 190 million euros (around 220 million US dollars) in total that have been levied against the Singapore-based company in France, the California fine may seem like loose change. While France's competition and anti-fraud agency DGCCRF (Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes) confirmed fining Shein 40 million euros (around 47.17 million US dollars) over deceptive business practices last week, the country's data privacy regulator CNIL (Commission Nationale de l'Informatique et des Libertés) has recently slapped the company with a recommendation for a 150 million (around 174 million US dollar) fine for violating laws governing the use of digital trackers used for targeted advertising, commonly called 'cookies'. The DGCCRF has accused the e-commerce giant of 'deceptive commercial practices', specifying after a year-long competition inquiry that it misled customers on discounted prices and on its environmental impact. Specifically, it found that Shein was raising prices before lowering them, thus giving consumers a false sense of a price deal. The agency probe found that 11 percent of advertised discounts were actually price increases; 57 percent offered no price reduction and for 19 percent, the price drop was less significant than advertised. Misleading discounts and cookie policy stumbling blocks for Shein in France While the antitrust agency confirmed that Shein has accepted the fine, CNIL's final decision is still pending and expected to be announced in the coming weeks. The allegations go back to an inspection almost two years ago, on 10th August 2023, during which CNIL found that Shein's website installed advertising cookies without obtaining users' consent first or being unclear and misleading about it. According to a rapporteur, 'even when users opted out, cookies requiring consent were still being stored and read.' While the proposed 150 million euros seem steep, the amount has come down from a proposed fine of 100,000 euros (116,000 US dollars) for every day that the website flaws persist. However, given recent steps by Shein to comply, a per-day amount is no longer pursued. Shein's attorney Sonia Cissé has criticised the proposed fine as 'completely disproportionate' according to AFP. Summary Shein settled a consumer protection lawsuit in California for 700,000 US dollars due to shipping delays and failure to offer refunds. Shein faces fines totalling 190 million euros in France for deceptive business practices, including misleading discounts and violating cookie policies.
Yahoo
10-07-2025
- Business
- Yahoo
France Fines Shein $47 Million for False Discounting and Deception
In France, Shein's going from 'c'est la vie' to 'pay the fee.' French regulators announced the culmination of nearly a year-long investigation Thursday, saying that Infinite Style E-commerce Ltd. (ISEL), which operates sales on behalf of Shein in the country, misled consumers on discounting and on its sustainability-related claims. More from Sourcing Journal Shein Faces Copyright Infringement Complaint from Brandy Melville Shein Reportedly Making Plans With Reliance to Export India-Made Goods Shein's Climate Ambitions Have Been Validated. Now What? France's General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) said it had doled out a €40 million ($47 million) fine to the company as a result of the now-concluded investigation, which ran from October 2022 to August 2023. According to the announcement, French law requires that the reference price posted on an e-commerce player's site be the lowest price the company has charged for the item within the past 30 days. The agency said 57 percent of the listings it tracked 'did not offer any real price drop,' as translated from French. An additional 19 percent of products 'showed a smaller reduction than claimed' and 11 percent 'were actually price increases.' The agency said that by 'artificially inflating' reference prices ahead of marking them down for sales, the company wrongly created the impression that consumers were receiving better deals than they actually had. The announcement from the antitrust watchdog also stated that ISEL and Shein could not properly prove the environmental claims made on its site. It particularly took issue with the company planned to reduce its greenhouse gas emissions by 25 percent. According to the agency, ISEL accepted the charge it had received. Shein did not immediately return Sourcing Journal's request for comment, but a spokesperson reportedly told Reuters that the agency had shared information about the regulatory issues in March 2024, which led ISEL to fix such issues within months. 'This means that all identified issues were addressed more than a year ago,' Shein reportedly said. According to Reuters, Shein also made it clear that ISEL intends to comply with all applicable French laws going forward. This is far from Shein's first time in the spotlight for regulatory concerns. The company has had issues with other nations across the globe. Last year, Italy announced it would start a probe into the company for greenwashing. It has also come under fire for potential violations of the EU Digital Services Act, under which it is categorized a Very Large Online Platform (VLOP), and thus, must adhere to the strictest rules put forth by the regulation. South Korea's government last year said it had found toxic chemicals in a a Shein product. False discounting issues have also become more frequent in U.S. courts; in recent years, companies like Under Armour, Fashion Nova, New York & Company, Old Navy and others have been accused of false pricing schemes by consumers.
Yahoo
10-07-2025
- Business
- Yahoo
French Watchdog Fines Shein for Failing to Disclose Microplastics in Its Products
France's consumer protection watchdog has fined the Dublin-based company that operates Shein's European websites and apps 1.1 million euros ($1.3 million) for failing to disclose the presence of synthetic microfibers, also known as microplastics, in more than 730 products. Since January 2023, the country's anti-waste Loi Anti-Gaspillage pour une Economie Circulaire, or AGEC, law has required companies to alert consumers to the possibility of plastic microfiber release during laundering whenever the proportion of synthetic materials in a product exceeds 50 percent. Polyester accounted for 81.5 percent of Shein's total fibers in 2024, according to its ESG report, up from 75.7 percent the year before. More from Sourcing Journal What Textile-to-Textile Recyclers Want From EU Legislation 'Big, Beautiful Bill' Set to End De Minimis Exception France Fines Shein $47 Million for False Discounting and Deception An investigation carried out in 2023 by the Directorate General for Competition Policy, Consumer Affairs and Fraud Control to verify compliance, however, found that Infinited Styles Ecommerce Co. Limited, which is sometimes referred to as Infinite Styles Services Co., fell short of requirements. Because the obligation 'particularly concerns' textiles, clothing and footwear, DGCCRF said in a statement, the information on microplastic-shedding products 'must therefore be clearer, more understandable, more sincere, and comply with the formality of the information provided by the regulatory text.' The move is more than just a heavy slap on the wrist, said Baptiste Carriere-Pradal, co-founder and director of business consultancy 2B Policy and chair of the technical secretariat for the European Union's Product Environmental Footprint method for apparel and footwear. As the first brand to be 'officially' sanctioned under the AGEC, Shein should serve as a 'wake-up call' for any company selling apparel in France that 'may not be entirely compliant yet.' 'It is now being actively enforced,' Carriere-Pradal said of the requirements, which he noted not every retailer or brand may be aware of. That ignorance could put them at great financial risk. With fines that can amount to 1,500 euros ($1,760) per act of non-compliance, 'the bill can quickly climb high,' he added. The broader European Union has no such disclosure law for textiles, clothing or footwear, and any restrictions on synthetic microplastics under Registration, Evaluation, Authorisation and Constriction of Hazardous chemical, or REACH, rules involve those that are intentionally added, such as certain types of glitter. Future iterations of the PEF category rules, which the European Commission recently welcomed as a means of measuring the environmental impact of clothing and shoes, will incorporate considerations such as microplastic shedding. Some 7.4 million metric tons of plastic pollution are contributed annually by synthetic clothing, according to Cotton Incorporated, the research and marketing company representing U.S. cotton. 'France's action signals a growing recognition that consumers have a right to know when clothing releases microplastic pollution,' said Lisa Erdle, director of science and innovation at the 5 Gyres Institute, a California nonprofit that campaigns against plastic pollution and recently published a microfiber playbook for fashion brands and manufacturers to reduce leakages. The Golden State considered legislation in 2018 that would require labelling on synthetic clothing, but the science was still emerging at the time. Now, 'we know much more,' she said. 'Microfibers from textiles are the most prevalent type of microplastic found in the environment, and they've been shown to harm aquatic organisms, carry toxic chemicals and even pollute indoor air,' she said. 'We need targeted solutions and policy interventions that address this source of microplastic pollution, and one potential approach could be requiring microfiber shedding disclosures. This would inform consumers and drive innovation toward materials that cause less harm in the environment and are safer for human health.' But microplastics aren't DGCCRF's only problem with Shein. Earlier this week, the agency slapped an even bigger 40 million euro ($47 million) fine on Infinited Styles Ecommerce Co. Limited for what it described as 'false discounting' from October 2022 to August 2023. French regulations require that the reference price for any discount be the lowest one given by a retailer during a 30-day period preceding the offer. Shein not only did not take into account prior discounts, it said, but the e-tailer sometimes jacked up the price before applying an offer. A Shein spokesperson said that Infinite Styles Ecommerce Co. Limited 'immediately' implemented corrective actions for both sets of violations in line with regulatory demands, completing them within two months following DGCCRF's notification in March 2024. 'This means that all identified issues were addressed more than a year ago,' the representative said. 'ISEL takes its legal and regulatory obligations in France very seriously and remains committed to transparency and compliance with French regulations.' Shein, doing business as Infinite Styles Services Co., has also come under scrutiny from other countries. It was only last September, for instance, that the Italian Competition Authority opened an investigation into whether Shein's website was trying to 'convey an image of production and commercial sustainability of its garments through generic, vague, confusing and/or misleading environmental claims.' Under Italian law, companies that breach consumer rights rules can face penalties ranging from 5,000 euros to 10 million euros ($5,600 to $11.7 million).
Bloomberg
10-07-2025
- Bloomberg
Nestle HQ in France Raided in Mineral Waters Investigation
French authorities raided the local headquarters of Nestlé SA near Paris on Thursday, as the scandal into the Swiss company's treatment of bottled mineral waters deepens. The evidence-gathering inspections, first reported by Radio France, were confirmed by the country's anti-fraud office, known as DGCCRF. The case concerns Nestlé's use of prohibited filtering methods for natural mineral waters.
