Chinese fast-fashion e-commerce giants Temu and Shein are under scrutiny by European Union (EU) regulators, who have mandated that the companies provide detailed accounts of their compliance with EU online content rules by July 12, 2024. This directive follows complaints from consumer bodies and represents a significant enforcement of the EU’s Digital Services Act (DSA).
The DSA imposes stringent requirements on digital platforms, particularly those classified as Very Large Online Platforms (VLOPs), due to their extensive user bases. These requirements aim to enhance the accountability of these platforms in combating illegal and harmful content, ensuring user protection, and promoting transparency.
The fast-fashion industry has designated Temu and Shein as VLOPs. This designation subjects them to heightened scrutiny and demands greater efforts in monitoring and managing the content on their platforms.
The European Commission has formally requested that Temu and Shein provide comprehensive information regarding several key aspects of their operations:
The stakes for Temu and Shein are high. Under the DSA, violations can lead to substantial fines, potentially amounting to as much as 6% of a company’s global turnover. This could translate into billions of dollars for companies of their size, emphasising the seriousness of the EU’s demands.
This move by the EU regulators is part of a broader effort to ensure that digital platforms operate in a manner that is transparent, fair, and protective of consumers’ rights. The complaints from consumer organisations have highlighted the need for stringent enforcement of these principles.
As the deadline of July 12 approaches, all eyes will be on Temu and Shein to see how they respond to the EU’s demands. Their responses will not only have an impact on their operations in Europe, but they could also set a precedent for other digital platforms under the purview of the DSA.
In the rapidly evolving landscape of digital commerce, the actions taken by regulators and the compliance of major players like Temu and Shein will shape the future of online consumer protection and platform accountability.