France fines Shein $60m over ‘deceptive’ sales practices

PARIS - France announced on July 3 a record €40 million (S$60 million) fine against e-commerce giant Shein over “deceptive commercial practices” after a competition inquiry, saying it misled customers on price deals and on its environmental impact.

The French competition and anti-fraud office said the investigation found Shein used “deceptive commercial practices towards consumers regarding... price reductions”, with the fine handed down with the blessing of the Paris prosecutor’s office.

The DGCCRF competition office said the nearly year-long probe found that the firm raised certain prices before lowering them.

It added that the China-founded retailer had accepted the fine.

“These practices of greatly discounted prices and permanent promotions give consumers the impression they’re getting a great deal,” said the DGCCRF.

If found that 11 per cent of advertised discounts it checked “were actually price increases”.

In 57 per cent of cases, Shein’s advertised promotions actually offered “no price reduction” and in 19 per cent of cases, the price drop was “less significant than announced”.

Launched in France in 2015, Shein has seen phenomenal growth in recent years and took its share in domestic clothing and footwear in 2024 to three per cent from two in 2021 – a significant slice in what is a notably fragmented market.

The company, which has become a figurehead for the downside of “ultrafast fashion”, is decried in some quarters for causing environmental pollution as well as indulging in unfair competition and allowing poor working conditions.

In a statement to AFP, Shein said it had put into action “without delay” necessary corrective action inside two months on learning of the DGCCRF probe against in March 2024.

It added it took its legal and regulatory obligations in France “very seriously” and was committed to transparency. AFP