France Slaps Shein with €40 Million Fine Over Greenwashing

Shein, the global fast-fashion powerhouse, has been fined €40 million by France’s consumer watchdog for what authorities have labeled “deceptive commercial practices.” The ruling marks a significant moment in Europe’s growing crackdown on misleading online retail practices, especially as fast-fashion giants face increasing scrutiny over how they market prices and sustainability.

False Discounts Under the Microscope

An investigation by France’s Directorate General for Competition, Consumer Affairs, and Fraud Prevention revealed that a large portion of Shein’s promotional pricing was misleading. Authorities found that over half of the discounts advertised did not reflect any actual savings. In many cases, the “original” prices were artificially inflated just before being marked down, violating French laws that require the comparison to be based on the lowest price within the previous 30 days.

This manipulation created a false sense of urgency for consumers, pressuring them to make purchases under the impression they were getting exclusive deals.

Greenwashing Accusations Surface

The investigation didn’t stop at pricing. Officials also flagged Shein for greenwashing—using vague or exaggerated claims about sustainability that didn’t hold up under scrutiny. The company had described itself as “responsible” and promised to reduce greenhouse gas emissions by 25 percent. However, investigators noted that the company failed to provide sufficient evidence or measurable benchmarks to back those claims, especially considering Shein’s rapid product turnover and low-cost manufacturing model.

Shein Responds

Shein acknowledged the French authority’s findings and stated that the issues were discussed in March 2024. According to the company, it took corrective action within two months. Additionally, it has since updated its pricing and sustainability language on its platforms. While the brand accepted the fine, it emphasized its commitment to improving compliance and transparency in its business practices.

Part of a Larger European Crackdown

The ruling comes amid broader European efforts to rein in fast-fashion practices. Regulators are increasingly focused on online retail transparency and environmental claims. Shein is also under investigation by the European Commission. They are being checked for potential violations of consumer protection laws and the Digital Services Act. This broader scrutiny could result in further fines and tighter restrictions on how Shein operates across the EU.

Shein’s Business Model Under Pressure

While €40 million may seem like a small dent for a company with billions in annual revenue, experts believe the fine is more symbolic than financial. It sends a clear message. That is, regulators are ready to challenge ultra-fast fashion’s business models. This is especially for those who rely on constant markdowns and aggressive advertising. The move could have ripple effects on Shein’s ambitions, including its anticipated IPO and continued global expansion.

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