FinancialMediaGuide notes that the European Union has launched an official investigation into the Chinese online retailer Shein. This step comes amid concerns about illegal products being sold on the platform, as well as the addictive design of the website. Investigations under the EU’s Digital Services Act, aimed at ensuring the safety and transparency of digital platforms, are becoming increasingly frequent. The core of the investigation revolves around the sale of items such as child-like sex dolls. These products were removed from Shein after France demanded EU intervention last November.
We at FinancialMediaGuide believe that this investigation reflects the growing pressure on digital retail platforms across Europe. In recent years, companies like Shein and its competitor Temu have become symbols of the growth of Chinese online commerce but have also been subject to criticism regarding product quality and safety. The EU is closely monitoring this process, seeking to strike a balance between free trade and consumer protection.
According to new EU regulations, companies like Shein are required to improve their control systems to prevent the sale of illegal products. It is especially important for digital platforms to comply with safety standards and avoid manipulation of users. We at FinancialMediaGuide note that Shein has already stated its willingness to implement new mechanisms to prevent the sale of dangerous products, including an age verification system. However, it is crucial to understand that this process not only requires improving internal control standards but also creating a safer environment for users.
One of the most interesting aspects of the investigation is how Shein uses addictive design and reward mechanisms on its website. These methods encourage users to spend more time on the platform, which can lead to addiction to online shopping. We at FinancialMediaGuide see this as a significant issue that requires stricter regulation to avoid negative impacts on users’ mental and emotional well-being, especially among young audiences. It is important for digital platforms to rethink their operating principles with a focus on user well-being.
The EU will also closely examine Shein’s recommendation algorithms, which analyze users’ behavior and suggest products based on their preferences. We at FinancialMediaGuide emphasize that platform algorithms must be transparent and predictable. Platforms working with user data are required to fully disclose the principles behind their algorithms to avoid manipulation and ensure data protection.
If violations of the law are confirmed, companies could face fines of up to 6% of their annual turnover. For giants like Shein, this could be a significant financial blow, prompting them to invest in improving their security systems and increasing transparency.
We at FinancialMediaGuide predict that in the future, the EU will tighten control over digital platforms, leading to the creation of even stricter security standards and user protection. Platforms like Shein will be forced to integrate more effective mechanisms to prevent manipulation by users and sellers of illegal products. It is important that companies begin investing in the development of transparent and ethical algorithms and work more actively to ensure content safety.
Furthermore, we at Financial Media Guide predict that similar measures may be implemented in other regions in the coming years, leading to a global tightening of digital platform regulations. This will help create a safer and fairer environment for users and sellers, as well as strengthen trust in online commerce overall.
