EU to probe Shein and Temu platforms amid flood of low value goods

Brussels — Chinese online marketplace Temu and fast-fashion retailer Shein will be liable for the sale of unsafe and dangerous products on their platforms, the European Commission said on Wednesday, as part of a crackdown against a flood of cheap e-commerce imports into the EU.

The EU executive also said it would co-ordinate a joint investigation by the Consumer Protection Co-operation Network of national consumer authorities into Shein based on suspicions that the company infringes EU consumer protection rules.

The measures by the EU executive echo a similar push by the US government which ended a trade provision this week used by retailers including Temu and Shein to ship low-value packages duty-free to the US.

The commission said its concerns were triggered by some 4.6 billion low-value items below €22 ($23) imported into the EU last year, equal to 12-million parcels a day, 91% of which came from China. The €4.6-billion figure was double that in 2023.

“Under certain conditions, marketplaces can also be held liable for the sale of non-compliant or dangerous products. They are exempted from liability for the illegal behaviour of the sellers, but subject to certain conditions,” the commission said in its guidelines.

It said cheap, unsafe imports posed unfair competition to EU sellers that follow the rules while the large number of packages being shipped has a negative impact on the environment and climate.

The EU executive will also propose to EU countries a handling fee for e-commerce imports to meet the cost of supervising such imports.

The commission, which in 2023 proposed scrapping the duty-free exemption for parcels below €150 as part of a reform of the bloc’s custom rules, urged EU countries to quickly adopt the measure.

Under a new measure called product safety sweep, EU countries can for the first time check via an e-surveillance tool before products are shipped whether they are dangerous or not.

“We want to see a competitive e-commerce sector that keeps consumers safe, offers convenient products, and is respectful of the environment,” EU tech chief Henna Virkkunnen said in a statement.

Shein said it would engage with the consumer agencies and the Commission.

“We share the CPC Network’s goal of ensuring European consumers can shop online with peace of mind, and we intend to work closely with the CPC Network and the commission to address any concerns,” a spokesperson said.

Temu, already the subject of an EU investigation under the Digital Services Act since last October, did not immediately respond to a request for comment.

Commission officials said they were assessing its response to their concerns and those of consumer watchdogs.

Reuters