The European Commission has opened formal proceedings against the Chinese-founded online retailer Shein under the Digital Services Act (DSA). The investigation will examine the sale of illegal products, the lack of transparency in its recommender systems, and what regulators describe as “addictive design” features.
The decision follows a preliminary analysis of Shein’s risk assessment reports, responses to multiple requests for information from the Commission, and additional information provided by third parties. The Commission had previously sought further clarification on Shein’s compliance with the DSA on June 28, 2024; February 6, 2025; and November 26, 2025.
Examining Systems to Prevent the Sale of Illegal Products
The first focus of the investigation concerns the systems Shein has put in place to limit the sale of illegal products within the European Union. Particular attention has been drawn to reports of childlike sex dolls and illegal weapons being sold on the platform. These products may constitute content linked to child sexual abuse material.
Henna Virkkunen, Executive Vice President for Tech Sovereignty, Security and Democracy at the European Commission, stated: “In the EU, illegal products are prohibited — whether they are on a store shelf or on an online marketplace. The Digital Services Act keeps shoppers safe, protects their well-being and empowers them with information about the algorithms they are interacting with.”
A senior EU official also commented: “We have a suspicion that the system of Shein is not built to avoid the sale of illegal products. Illegal products? There is still a lot there so something is probably not working.”
Addictive Design and User Well-being
The second focus concerns risks associated with the platform’s design. Features such as bonus point schemes, rewards programs, and gamification mechanisms aimed at increasing user engagement may pose risks to users’ mental well-being and online consumer protection.
This marks the second investigation into the “addictive design” of an online retail platform, following proceedings launched against Temu in late 2024. The EU is signaling a growing emphasis on how digital behavioral design impacts consumer protection in the online marketplace.
Transparency of Recommender Systems
The third area under scrutiny is the transparency of Shein’s recommender systems. Under the DSA, platforms must disclose the main parameters used in their recommender systems and provide users with at least one easily accessible alternative that is not based on profiling.
According to preliminary findings, Shein’s explanation of how its recommender systems functioned was described as being provided “in a very general manner.” Regulators will assess whether the company’s algorithmic design and disclosures adequately safeguard user choice and transparency.
Shein’s Response and What Comes Next
Shein has stated that it takes its obligations under the DSA seriously and has cooperated fully with both the European Commission and Coimisiún na Meán, Ireland’s Digital Services Coordinator, which is associated with the investigation.
In a statement, the company said: “Over the last few months, we have continued to invest significantly in measures to strengthen our compliance with the DSA. These include comprehensive systemic-risk assessments and mitigation frameworks, enhanced protections for younger users, and ongoing work to design our services in ways that promote a safe and trusted user experience.”
The European Commission emphasized that the opening of formal proceedings does not prejudge the outcome of the investigation. However, confirmed infringements of the DSA can result in fines of up to 6 percent of a company’s global annual turnover. As a last resort, a suspension of operations within the EU is not ruled out.
The case is separate from individual legal proceedings in France, coordinated consumer protection actions, and market surveillance measures under the General Product Safety Regulation (GPSR), though it complements those frameworks.
As digital platforms face increasing regulatory scrutiny, the Shein investigation reflects the EU’s broader stance on cross-border e-commerce and algorithm-driven commerce — and signals a new phase in the governance of online retail ecosystems.
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