EU opens formal investigation into Shein over sale of child-like sex dolls and addictive app design

The European Union has initiated a formal investigation into Shein, a global online retailer, following concerns raised by French regulators regarding the sale of "child-like sex dolls" on the platform. This investigation is part of the EU's enforcement of its Digital Services Act (DSA), which governs online services and aims to ensure compliance with regulations concerning illegal product sales, including content that may constitute child sexual abuse material. The European Commission is particularly focused on whether Shein's systems for curbing illegal product sales are adequate and effective. In addition to the sale of illicit goods, the investigation will also scrutinize Shein's app design, which has been described as potentially addictive. The Commission is concerned about the retailer's use of gamified programs that reward users with points and other incentives, which may contribute to addictive shopping behaviors. The investigation will assess how Shein engages users through these features and whether the company is taking sufficient measures to mitigate the risk of addiction. Furthermore, the Commission will examine Shein's algorithmic recommendation systems, which suggest products to users. The investigation will require Shein to disclose how these systems operate and to provide a user experience that does not rely on profiling. This inquiry follows a similar investigation into another low-cost retailer, Temu, which was found in violation of the DSA last year. If breaches are confirmed, Shein could face significant fines as the EU intensifies its regulatory scrutiny of large tech companies.