EU Launches Formal Investigation into Shein Over Illegal Products and Addictive Design

Brussels has initiated a formal investigation into Shein, the Chinese-founded fast-fashion retailer, under the Digital Services Act (DSA). The probe centers on concerns regarding the sale of illegal products, including potentially harmful items like childlike sex dolls, as well as the platform’s “addictive design” and lack of transparency in its recommender systems.

Investigation Details

The European Commission announced the investigation on Tuesday, February 17, 2026, following information requests made from the company last year. The investigation will specifically examine three key areas:

• Illegal Products: Concerns exist that Shein’s platform facilitates the sale of products prohibited under EU law, including potentially dangerous or illegal goods.
• Addictive Design: The Commission will assess whether Shein’s platform design, including features like bonus points programs, gamification and rewards, may pose risks to users’ mental well-being.
• Recommender Systems: The investigation will scrutinize the transparency of Shein’s recommender systems, which suggest products to users, ensuring they comply with DSA requirements.

Breaches of the DSA can result in substantial fines, potentially reaching up to 6% of Shein’s total global annual turnover.

Shein’s Response

Shein stated it has “always co-operated fully with the European Commission” and will continue to do so throughout the investigation. The company highlighted its recent investments in measures to strengthen its DSA compliance.

Broader Context: EU’s Digital Services Act

This investigation is part of a broader effort by the EU to enforce its Digital Services Act, a landmark set of rules aimed at regulating online platforms and protecting users. The DSA focuses on ensuring a safe and transparent online environment, particularly for large platforms like Shein and Temu.

The EU previously launched an investigation into Temu in late 2024 for similar breaches of the DSA related to the sale of illegal products.

Additional EU Measures

Beyond the DSA investigation, the EU is too accelerating the implementation of new fees on small packages ordered online from platforms like Shein. This move aims to address the influx of low-priced goods from China and ensure consumer safety.

Past Penalties

Shein was previously fined €40 million by French regulators in July 2025 for misleading consumers regarding price reductions and environmental commitments.

Shein’s Business Model

Shein’s rapid growth is fueled by a unique business model that relies on algorithms to identify trending designs and quickly produce small batches of clothing. This allows the company to offer a vast selection of products at competitive prices. However, this model has also raised concerns about labor practices and tariff exemptions.

Monthly Active Users

From February 1, 2024, to July 31, 2025, SHEIN had an average of 145.7 million monthly active users in EU Member States.