France’s antitrust agency has fined fast-fashion brand Shein €40 million for allegedly using deceptive sales and marketing practices.

According to the regulator, the retailer misled consumers about the reality of price reductions and the company's commitment to environmental claims.

The Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF) revealed that an investigation conducted between 1 October 2022 and 31 August 2023 found that Infinite Style E-commerce LTD (ISEL), the company responsible for sales of Shein-branded products, had allegedly misled consumers about the reality of the discounts available to them.

The investigation found that Shein often did not use the lowest price from the previous 30 days as the reference for its advertised discounts, which is required under French law.

“By not taking into account previous promotions or by sometimes increasing certain prices before applying a reduction, Shein has violated these provisions,” it said.

According to the agency, these practices gave consumers the impression that they were getting a good deal when completing an online purchase.

“However, 57 per cent of the ads checked by the DGCCRF's SNE offered no price reduction, 19 per cent offered a smaller reduction than advertised, and 11 per cent were actually a price increase,” it added.

Furthermore, according to the agency, the company failed to justify the environmental claims made on its website, in particular the message that it was a responsible company that would limit its environmental impact by reducing greenhouse gas emissions by 25 per cent.

The antitrust agency said that the China-founded retailer had accepted the fine.

Last month, Pan-European consumer organisation BEUC filed a formal complaint with the European Commission against Shein, accusing the company of using deceptive "dark patterns" designed to pressure customers into excessive purchasing.

The complaint, supported by 25 member organisations across 21 countries including France, Germany and Spain, details what BEUC describes as "aggressive commercial practices" employed by the Chinese-owned online retailer.

Retail Systems has contacted Shein for comment.

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