EC Designates Shein as a Very Large Online Platform

The European Commission has formally designated Shein as a Very Large Online Platform (VLOP) under the Digital Services Act (DSA). Shein is a fashion online retailer with an average of more than 45 million monthly users in the European Union. This user number, which Shein has communicated to the EC, is above the DSA threshold for designation as a VLOP.

Following the designation as a VLOP, Shein will have to comply with the most stringent rules under the DSA within four months of its notification, such as the obligation to adopt specific measures to empower and protect users online, including minors, and duly assess and mitigate any systemic risks stemming from their services. More specifically, these additional obligations include more diligent surveillance of illegal products, enhanced consumer protection measures, and more transparency and accountability.

Since 17 February 2024, all online platforms, including the online marketplace service of Shein, already have to comply with the general obligations under the DSA. These general provisions include the obligations for online marketplaces to ensure the traceability of traders on their platforms, design their interface in a manner that facilitates traders' compliance with their legal obligations under EU law, and inform consumers of their purchase of an illegal product, the moment they become aware of the product's illegality.

The DSA also requires all online platforms, including marketplaces, to provide user-friendly mechanisms to allow users or entities to notify illegal content, prioritize the treatment of notices submitted by so-called “trusted flaggers”, provide statements of reasons to users when their content is restricted or removed, provide an internal complaint-handling system for users to appeal content moderation decisions, and redesign their systems to ensure a high level of privacy, security, and safety of minors. All platforms also have to ensure that their interfaces are not designed in a way that deceives or manipulates the users, clearly label advertisements on their interfaces, stop presenting targeted advertisements based on profiling of sensitive data, or targeted at minors, have clear terms and conditions and act in a diligent, objective and proportionate manner when applying them, and once a year publish transparency reports on their content moderation processes.

Following its designation as a VLOP, the EC will be competent to supervise Shein's compliance with the DSA in cooperation with the Irish Digital Services Coordinator. The Commission services will carefully monitor the application of the DSA rules and obligations by the platform, especially concerning measures to guarantee consumer protection and address the dissemination of illegal products. The Commission services are ready to engage closely with Shein to ensure these are properly addressed.