SENNA

European Regulators Put China's SHEIN to the Test in Landmark Case for Digital Services Act

Brussels - The European Commission's decision to launch formal proceedings against Chinese fast-fashion giant SHEIN marks a watershed moment in the implementation of the bloc's landmark Digital Services Act (DSA). For EU authorities, the online platform has become the first real-world test case for the DSA's enforcement mechanisms, designed to force Very Large Online Platforms to demonstrate robust control over their value chains, algorithms and content moderation.

The case was triggered by repeated alerts from French regulators, who documented the presence of illegal products, dangerous items and even banned goods like child sex dolls and certain weapons on SHEIN's platform. These red flags convinced the Commission that there were systemic risks to European consumers, paving the way for an extensive information request that compels SHEIN to hand over internal documents, procedures and compliance evidence.

Under the DSA, platforms of SHEIN's size are subject to heightened due diligence requirements - they must map their risks, deploy mitigation measures, ensure effective protection of minors, prevent circulation of illegal goods, and prove the effectiveness of their control mechanisms. These obligations pose a major challenge for SHEIN's "ultra-fast marketplace" model, which relies on tens of thousands of fragmented suppliers, a constant flow of new products, and heavily outsourced production.

The next steps will hinge on SHEIN's response. If the information provided is deemed insufficient, the Commission can launch a formal investigation that could result in fines of up to 6% of the company's global turnover - a potentially crippling penalty for the fast-fashion disruptor. Industry sources say the case will set a crucial precedent, testing the EU's resolve to rein in the excesses of online platforms, even powerful ones like SHEIN with its breakneck growth and complex supply chains.

"This is the DSA's crash test moment," said one senior Brussels official familiar with the proceedings. "SHEIN has become the poster child for how the new rules will be applied in practice to the biggest players. The outcome will shape the future trajectory of platform regulation in Europe."