A bold blow against ultra-fast fashion has been dealt by the French government as it fined Chinese e-commerce behemoth SHEIN € 40 million (around US $ 47 million) for misleading business practices. The development, announced on 3rd July by Trade Minister Véronique Louwagie, reflects increased alarm regarding regulatory loopholes targeted by international digital retailers.
Addressing the Forum des Grandes Échelles—an elite organisation for 16,000 shops and 150,000 retail workers— Véronique’s speech was directed at the top players from France’s department stores and retail chains which are in Paris. The fine comes after a DGCCRF (France’s consumer and fraud agency) inquiry and further investigations with regard to other players in the industry continue, but details are kept under wraps.
The morning sessions revealed industry frustration at what many perceive as an uneven playing field. European retailers play by strict compliance rules, while fast fashion platforms all too often are allowed to operate under less stringent oversight. In response, Véronique introduced a harder line enforcement regime targeted directly at foreign platforms: product sampling for checks for compliance will be tripled and powers will be extended to carry out thorough inspections throughout the supply chain. There will also be a new coordination procedure with Customs Minister Amélie de Montchalin, requiring data-sharing between customs administrations and the DGCCRF for all imported parcels.
France is not the only one. Véronique verified that enforcement is ramping up at the EU level under the Digital Services Act, with SHEIN and its rival Temu both under European Commission scrutiny. “France, Germany and Ireland have officially complained about a number of practices that break EU law,” she said. SHEIN has 30 days to answer.
Demands to follow the 2021 delisting of e-commerce platform Wish—prohibited in France for refusing to enforce safety directives—have increased. Although SHEIN and others have up to now complied with regulatory requests, Véronique is calling for EU-wide legal changes permitting delisting even where there has been partial cooperation.
She also pointed to the huge quantity of low-value packages entering Europe’s frontiers: more than 800 million packages worth less than € 150 (US $ 176) arrive in France annually, part of a pool of 4.5 billion that are in circulation within the EU. She said that the existing customs system not only jeopardises consumer protection, but also places domestic companies at a competitive disadvantage. She reiterated France’s determination to close loopholes in tax on such imports.
The SHEIN fine follows months of growing pressure about its environmental impact, working conditions and price strategies. Whether this is a one-off warning or the beginning of systematic change in Europe’s approach to ultra-fast fashion is open to question—but the message from Paris is certainly stern.
