Paris (AFP) – France announced Thursday a record 40 million-euro fine against e-commerce giant Shein over “deceptive commercial practices” after a competition inquiry, saying it misled customers on price deals and on its environmental impact. The French competition and anti-fraud office reported that the investigation found Shein used “deceptive commercial practices towards consumers regarding…price reductions.” The fine was handed down with the blessing of the Paris prosecutor’s office.
The DGCCRF competition office stated that the nearly year-long probe uncovered that the firm raised certain prices before lowering them. It emphasized that these practices of greatly discounted prices and permanent promotions give consumers the impression they’re getting a great deal. It was found that 11 percent of the advertised discounts it checked “were actually price increases.” In 57 percent of cases, Shein’s advertised promotions offered “no price reduction,” and in 19 percent of cases, the price drop was “less significant than announced.”
Launched in France in 2015, Shein has seen phenomenal growth in recent years, increasing its share in the domestic clothing and footwear market last year to three percent from two in 2021 — a significant slice in what is a notably fragmented market. The company, which has become a figurehead for the downside of “ultrafast fashion,” is criticized in some quarters for causing environmental pollution, indulging in unfair competition, and allowing poor working conditions.
In a statement to AFP, Shein said it had put into action “without delay” the necessary corrective action within two months of learning about the DGCCRF probe in March of last year. It added that it takes its legal and regulatory obligations in France “very seriously” and is committed to transparency.
© 2024 AFP
