France fines retailer Shein 40 million euros for misleading discounts

 France fines retailer Shein 40 million euros for misleading discounts

France's competition and consumer protection agency has fined Shein €40 million for deceptive commercial practices. The fast-fashion retailer, known for offering low-cost clothing online, was found to have violated French consumer protection laws, especially those governing how discounts are advertised.

The watchdog revealed that Shein’s discount strategy misled consumers by not adhering to the rule that any stated discount must be based on the lowest price charged in the 30 days before the offer. Instead, Shein was found to have either ignored past prices or, in some cases, even raised prices before applying a so-called “discount.” These actions misrepresented the actual value customers were receiving.

The investigation analyzed thousands of Shein’s products on its French website from October 1, 2022, to August 31, 2023. The findings were striking: 57% of the listed discounts were not genuine, 19% were exaggerated, and 11% were actually disguised price increases. This led the French authorities to conclude that Shein had misled consumers about the authenticity of the savings offered on its platform.

The company behind Shein’s sales in France, Infinite Style E-Commerce Co Ltd (ISEL), accepted the fine. This acceptance confirms the validity of the findings, even though Shein says it had already addressed the issues before the ruling was made public. According to French law, such misleading marketing tactics are taken seriously, especially in industries like fashion where price-driven promotions heavily influence consumer choices.

This case underscores growing regulatory scrutiny on fast-fashion giants and their often-aggressive pricing strategies, particularly in Europe where consumer protection laws are more strictly enforced compared to other regions.

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Following the €40 million fine issued by the French consumer protection authority, Shein issued a formal response via its representative company Infinite Style E-Commerce Co Ltd (ISEL). The company acknowledged that it had been informed by French regulators in March 2023 about potential violations related to both reference price practices and environmental regulations. In response, Shein claims to have taken corrective measures within two months of that notification.

According to Shein, the issues flagged by regulators were fully resolved over a year ago. The company emphasized that it is committed to complying with local laws and has made necessary changes to its pricing and marketing strategies to meet regulatory expectations. However, French authorities proceeded with the fine, suggesting that the gravity and scale of the violations warranted official sanctions regardless of the corrections made after the fact.

The case has sparked wider discussions around the practices of fast-fashion retailers, especially concerning how discounts are used to manipulate buyer perception. In the digital retail space, where consumers are constantly presented with “flash deals” and “limited-time offers,” transparency in pricing is becoming increasingly important. Regulators across Europe are paying closer attention to whether businesses are genuinely passing on savings or simply inflating original prices to make discounts appear larger.

While Shein’s rapid response to the notice may help its reputation somewhat, the hefty fine sends a strong message to all online retailers operating in France and the European Union. It reinforces the importance of respecting consumer rights and being truthful in promotional strategies.

The Shein case may also encourage shoppers to scrutinize deals more closely and push for greater accountability from companies that rely on constant discounts as a core part of their business model.