Shein added to EU digital rulebook’s ‘systemic risk’ list

The European Commission announced that it had designated Chinese online fashion retailer Shein as a “very large online platform” (VLOP) under the Digital Services Act (DSA) on Friday (26 April).

With over 45 million monthly EU users, the Commission said the platform crossed the designation threshold under the DSA and by the end of August, it must implement measures to protect users, especially minors, from illegal content and products.

According to the Commission, Shein, after being labelled as a VLOP, must adhere to the strictest regulations outlined in the DSA within four months of its notification. This includes implementing measures to support and safeguard online users, especially minors, and effectively evaluating and addressing any systemic risks associated with their services.

The DSA aims to create a safer digital environment by assigning responsibility to online actors, including how to deal with illegal content including dangerous goods and harmful content like hate speech.

Last April, the Commission published the first list of VLOPs, which, due to the amount of monthly traffic they receive, are deemed ‘systemic’ for society and must follow a specific regime of content moderation.

Measures Shein will have to implement include diligent surveillance of illegal products, enhancing consumer protection measures, and ensuring transparency and accountability through audits and reporting requirements.

Shein must also assess and mitigate risks associated with its platform, structure its services to protect consumer safety, and provide transparency reports. Additionally, the retailer must ensure compliance with the law and annually undergo external audits.

After being designated as a VLOP, the Commission will supervise Shein for compliance, working in collaboration with the Irish Digital Services Coordinator.

Not everyone agrees

Last year, other retailers, such as Zalando and Amazon, challenged their designation as VLOPs under the DSA. Zalando argued its retail-focused business model falls outside the DSA’s scope, citing a need for more transparency in the Commission’s selection process.

Similarly, Amazon contended it does not qualify as a systemic platform, emphasising its primarily retail-oriented revenue model and not being the largest retailer in any EU country.

In December, the Commission announced that pornography websites XVideos, Pornhub, and Stripchat would be included on the DSA’s list. However, in March, the three websites said they were suing the EU over their new obligations.

In February, Meta and TikTok also confirmed they are suing the Commission over an annual supervisory fee that companies listed under the DSA must pay.

[Edited by Eliza Gkritsi/Alice Taylor]

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