Shein with high fines in California and France

The Chinese Ultra-Fast-Fashion giant Shein currently has to dig deep into his pocket, as it is confronted with high punishments in two countries.

The global e-commerce company has a consumer right now: included in the California districts of Napa, Los Angeles, San Francisco and Sonoma. The company agreed to pay $ 700,000 (around 600,000 euros) in civil terms and investigations.

Delivery delays cost Shein in California

Among other things, the lawsuit said that Shein has made it guilty of “illegal business practices by noticeably notification inside or reimbursements were offered to them if their orders were not sent in time”.

According to California law, orders placed online must be sent within 30 days; In the past, if the company promises faster shipping, or later, if a longer shipping time is specified. If a company does not send products within 30 days, it has to take measures: For example, consumers: Interior information about the expected duration of the delay or offer reimbursement options.

According to the lawsuit, Shein has repeatedly failed to send products within the prescribed deadlines, to send the necessary delay announcements or to offer its customers: inside reimbursements “.

“California consumers: Inside, it deserves that the products for which they pay are delivered in time, and Shein repeatedly misused this trust by not providing any reimbursements if it could not deliver in time. Our office is proud to include Sonoma, Los Angeles and San Francisco for his illegal business practices To be accountable, ”said district attorney Allison Haley on Wednesday in a press release.

As part of the judgment, Shein is also prohibited from “giving untrue or misleading information about the shipping or delivery time of products and violating laws in connection with shipping delays”.

In an explanation on Thursday, Sheins press office confirmed that the company had taken measures to “make sure that our shipping and customers: internal practices and our communication with the applicable laws, including the improvement of our internal processes, to provide customers with clearer and more complete information about delivery times”.

Millions of penalties in France

Compared to two fines of 190 million euros, which were imposed in Singapore in France, the California punishment appears more like pocket money.

The French competitive and fraud control authority DGCCRF (Direction Générale de la Concurrence, de la Consommation et de la répression of the Ms.des) confirmed last week that it had imposed a fine of 40 million euros due to misleading business practices. The French data protection authority CNIL (Commission Nationale de L’Idtique et des Liberté) only pronounced a recommendation for a fine of 150 million euros this week. The reason for this are violations of laws on the use of digital trackers for targeted advertising, which are generally referred to as ‘cookies’.

The DGCCRF has accused the e-commerce giants for “misleading business practices” and, after a one-year investigation, specified that he had deceived the customers about pricing and its environmental effects. In particular, the authority found that Shein increased prices before they were reduced, causing consumers to get a false feeling of an offer inside.

The investigation of the authority showed that only 11 percent of the advertised discounts were actually price increases; 57 percent did not offer a price reduction and at 19 percent the price drop was less significant than advertised.

Misleading discounts and cookie guidelines are stumbling blocks for Shein in France

While the antitrust authority confirmed that Shein had accepted the fine of 40 million euros, CNIL’s final decision is still pending and is expected to be announced in the coming weeks.

The allegations go back to an inspection almost two years ago, on August 10, 2023. The CNIL found that the Wein website installed advertising cookies without first obtaining the consent of the users: obtaining inside or giving unclear and misleading information. According to a report, “cookies that require approval were also stored and read when users: had been deregistered”.

While the proposed 150 million euros appear high, the amount of a Per-Diem money penalty of 100,000 euros has dropped-for every day on which the shortcomings of the website continue. In view of the latest steps of Shein to comply with the regulations, a daily amount is no longer sought. According to AFP, Sheins lawyer Sonia Cissé has criticized the proposed fine as “completely disproportionate”.