Report from Wall Street Journal
In Brief – Shein scored a win in French court with a ruling that rejected a government effort to fully suspend the ecommerce platform in France for three months. French authorities had sought the shutdown after finding third-party seller listings including childlike sex dolls, bladed weapons, and medications on the site, but the court said the penalty was disproportionate. Shein, founded in China and now headquartered in Singapore, said it promptly removed the offending items and temporarily blocked the products of all third-party sellers from their site in France after the government raised concerns. The Paris court cited Shein’s responsiveness and ruled that a full shutdown would unjustifiably infringe on the company’s freedom to conduct business. The judges did order Shein not to resume sales of pornographic products without age-verification measures being put in place. The French government said it plans to appeal.
Context – Shein, known for very low-priced fast fashion delivered directly to customers from factories in China, opened its first physical shop in Europe in a Paris department store in early November, drawing many shoppers and protesters. Along with French law enforcement efforts to shut down the site, a large coalition of French retailers and brand owners filed a class action lawsuit accusing the company of engaging in systematic unfair competition and seeking up to €3 billion in damages. Consumer advocates and traditional retailers in Europe have long complained about the sale of unsafe products on digital marketplace platforms, with Temu and Shein recently joining Amazon and AliExpress as top targets. The EU Digital Services Act (DSA) regulates how online marketplaces deal with illegal and objectionable products and content. The European Commission has engaged in DSA investigations of AliExpress and Temu, and there are calls for the commission to promptly open one against Shein, while a French grocery store chain CEO is calling for both Temu and Shein to be banned from Europe entirely for two years while new rules to regulate them are crafted.