France vs. Shein: €40M Fine Issued for Unfair Commercial Practices

France steps up its crusade against Shein. The French antitrust office, which watches over both consumer protection and free competition, has finally imposed a sanction today against the Asian ecommerce giant. The agency’s decision comes after more than a year of investigation in which it has studied the discounts advertised by the company on thousands of its products.

The penalty imposed on Shein has reached a value of €40 million, based on misleading discounts. According to French law, the reference price on any advertised discount must be the lowest price that the item has had within 30 days before. The Asian giant, the entity denounces, would have violated this regulation and announced discounts on a higher comparable basis and even raising the price before applying the reduction.

According to Reuters, the investigation has shown that the company “has misled consumers about the veracity of the discounts they thought they were benefiting from”.

France already approved in June a law against ultra-fast fashion

Shein has replied to the sanction, assuring that Infinite Style E-commerce Co Ltd, the company through which the Asian giant operates in France addressed in May last year other accusations regarding price and sustainable regulations. “This shows that the allegations you refer to were settled a year ago,“ the company added.

After more than a year of investigation, the entity’s research analyzed thousands of the products advertised on Shein’s French platform. Of the total, up to 57% of these discount ads were not truthful, another 19% advertised a higher discount than they were actually subject to and 11% even listed a higher price than before the reduction.

This sanction is in addition to the law recently passed by the country against ultra-fast fashion. The text, which has been dubbed the anti-Shein law, makes explicit references to the Asian company’s business, attributing to a business model such as that of the company the high environmental impact of the sector, as well as the fall and closure of some of France’s national companies.