Chinese-founded fast-fashion company Shein will have to comply with tough new EU online content rules after its user numbers soared above a key benchmark, joining a score of other Big Tech companies already subject to the rules, the European Commission said on Friday.
Companies with more than 45 million users are regarded as very large online platforms (VLOP) under the EU’s Digital Services Act (DSA), which are required to do more to fight illegal and harmful content as well as counterfeit products on their platforms.
The online retailer recently posted 108 million monthly active users in the EU.
“Following today’s designation as a VLOP, Shein will have to comply with the most stringent rules under the DSA within four months of its notification (i.e. by the end of August 2024),” the EU executive said in a statement.
DSA obligations include adopting specific measures to empower and protect users online, including minors, and assessing and mitigating systemic risks stemming from their services.
Shein said it was committed to comply with the rules.
“We share the Commission’s ambition to ensure consumers in the EU can shop online with peace of mind, and we are committed to playing our part,” Leonard Lin, its global head of public affairs, said in a statement.
Shein, which is eyeing a U.S. initial public offering, launched its marketplace in the EU in August last year.
The DSA applies to all online platforms since Feb. 17.
Sixteen tech firms, including Amazon.com, Apple, Alibaba, Microsoft and three pornography sites, are subject to the DSA, with the bloc asking some for information on steps taken to counter illegal content and goods sold online.
The EU is already investigating social media platform X and ByteDance’s TikTok. Violations can result in fines of as much as 6 per cent of a company’s global turnover.