The European Commission has intensified its scrutiny of fast-fashion giant Shein, sending a fresh request for information (RFI) to the ecommerce platform under the Digital Services Act (DSA). This move comes amid growing concerns over the risks posed by low-cost ecommerce marketplaces, including the distribution of dangerous and/or counterfeit products, environmental harms, and competition concerns.

The RFI, announced on Thursday, covers several key areas, including internal documents and detailed information on risks linked to illegal content and goods on Shein's marketplace, transparency of its recommender systems, and access to data for qualified researchers. The Commission is also seeking information on measures adopted to mitigate risks relating to consumer protection, public health, and users' wellbeing, as well as details on the protection of users' personal data.

Shein has been given until February 27 to respond to the RFI, after which EU enforcers will assess its submissions to determine any next steps. These could include additional requests for information or even a formal investigation proceeding. The Commission's move is seen as a way to keep up pressure on the ecommerce giant, which was designated a very large online platform (VLOP) only last April.

The EU has been vocal about its concerns over the risks stemming from low-cost ecommerce marketplaces, and yesterday unveiled a strategy targeting these issues. The Communication on Safe and Sustainable E-Commerce aims to address the distribution of dangerous and/or counterfeit products, environmental harms, and competition concerns posed by an influx of low-quality goods into the EU single market. However, the strategy still requires agreement from co-legislators before it can be implemented.

Customs reforms are a key plank of the strategy, but proposed changes require Member State buy-in. In the meantime, Commission officials emphasized that various existing laws already apply to low-cost ecommerce platforms, including product rules, consumer protection laws, and the bloc's online governance framework. The DSA, in particular, includes restrictions on anti-consumer tactics like dark patterns, which are squarely within the Commission's remit to enforce.

Despite clear concerns expressed over product safety and consumer protection, the EU has yet to open formal investigation proceedings on Shein or low-cost rival Temu. However, the Commission has had a DSA probe open on another marketplace, AliExpress, since March last year. That probe covers issues including risk mitigation, content moderation, ad transparency, algorithmic accountability, the traceability of traders, and data access for researchers.

The latest RFI on Shein underscores the EU's commitment to taking action on these concerns. While the bloc has yet to issue any DSA fines on designated VLOPs or search engines, penalties for non-compliance can reach up to 6% of global annual turnover. As the EU continues to scrutinize the ecommerce sector, it remains to be seen how Shein will respond to the latest RFI and what implications this may have for the industry as a whole.

Shein has been contacted for a response to the latest Commission RFI, but has yet to comment. The outcome of this development will be closely watched, as the EU seeks to ensure a safer and more sustainable ecommerce environment for its citizens.