Report from New York Times
In Brief – A large coalition of French retailers and brand owners has filed a class action lawsuit against Chinese ecommerce platform Shein, accusing the company of engaging in systematic unfair competition. The plaintiffs are seeking up to €3 billion in damages, arguing that Shein has lured consumers away over the past five years through allegedly deceptive promotions and by selling products that fail to meet French consumer protection and safety standards. French Retail Council president Bernard Cherqui, one of the parties to the litigation, called the company a “systemic threat” to domestic businesses, while Shein issued a statement rejecting the allegations as unfounded and saying that it regrets the shift toward litigation instead of dialogue.
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. The French Finance Ministry quickly moved to block Shein’s website in France, alleging that officials had found illegal products, including “childlike” sex dolls and knife-style weapons for sale on the site. Shein responded by blocking all third-party sellers on its French platform, and the French consumer watchdog soon reported that illegal products were no longer on the site, leading to Finance Ministry proceedings to block the website being suspended, although a Paris prosecutor was continuing with a case to suspend the website for three months. 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 Temu and Shein to be banned from Europe entirely for two years while new rules to regulate them are crafted.