The European Commission has announced that it will hold Shein and Temu liable for the unsafe products sold on their virtual e-commerce platforms. European regulators are cracking down on cheap, unsafe, and often dangerous e-commerce imports amidst a surge of low-value products flooding the European Union.
According to the Commission, it will conduct a joint investigation with the Consumer Protection Cooperation Network of national consumer authorities into Chinese fast-fashion retailer Shein to confirm suspicions of the retailer infringing consumer protection policies in the EU.
The move comes just days after the U.S. government got rid of a trade provision that allowed retailers like Shein and Temu to export low-value packages to the U.S. duty-free. Such platforms have become incredibly popular in recent years by fulfilling the massive demand for cheap consumer products like clothing.
Europeans imported a whopping 4.6 billion low-value products worth less than $23 each in 2024 at a rate of 12 million parcels a day and a majority of these products are from China. Most of them weren’t compliant with EU laws. This piqued the commission’s interest in platforms such as Temu and Shein that manufacture and dispatch most of their low-value products from China.
Commission guidelines note that marketplaces can be liable for dangerous or non-compliant product sales under specific conditions. While marketplaces aren’t liable for any illegal acts their sellers engage in, they are still subject to some conditions. In this case, the surge of cheap and unsafe e-commerce imports flooding the EU is unfair competition to EU sellers who comply with safety rules.
Furthermore, the sheer amount of products entering the EU is putting immense pressure on customs officials and impacting the environment negatively. Low-quality products are more likely to break down faster and require more frequent replacements, resulting in more hard-to-recycle, low-quality, and sometimes toxic products that can be extremely difficult to destroy.
As a result, the EU will begin subjecting products from sites like Temu and Shein to stricter checks. European Commission officials have also encouraged EU policymakers to eliminate custom duties exemptions for parcels priced below $129. A large portion of these low-cost products aren’t safe, are often counterfeited, and can sometimes be dangerous, Commission vice-president Henna Virkkunen says.
The commission will team up with the custom authorities of the European Union’s 27 member states to increase market testing and surveillance of e-commerce imports. European Commissioner for Trade, Maroš Šefčovič suggested imposing a handling fee on online retailers like Shein and Temu to cover the cost of ensuring their products comply with EU safety and trade rules.
Other China-based e-commerce platform companies like Alibaba Group Holding Ltd. (NYSE: BABA) would be well-advised to take measures to avoid being targeted in the same way that Shein and Temu have been pointed out as sources of substandard products entering the EU market.
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