By Tarek Salame
It looks like a bargain: a dress marked down 70% off, available only today. But in France, regulators were not convinced enough after months of investigation. They fined Shein €40 million for manipulating discount prices, padding sustainability claims without proof, and misleading their customers. For Shein, it’s the largest regulatory fine it has faced in Europe, and it lands just as the fast fashion giant prepares for a highly scrutinised IPO.
This is how a global e-commerce empire, built on urgency algorithms and influenced by aesthetics, is now facing new pressure from watchdogs, governments, and a digital marketplace that no longer buys what is being sold. So what did Shein get caught doing? And why are regulators calling this a turning point for online fashion?
What was Shein fined for
The French regulators spent 11 months from October 2022 to August 2023. The French regulators reviewed a huge chunk of Shein listings and found that most of its sales were not real:
57% of the supposed discounts didn’t exist.
19% offered barely any real drop.
And 11% were actually price hikes — marked up first, then “slashed” to look like deals.
Usually, when an outlet states that something is 50% off, it must be 50% off compared to its lowest price within the last 30 days. But Shein was inflating prices and labelling them as bargains, which creates a false sense of urgency and savings when none of those existed.
The site also claimed that it was reducing emissions and cutting microfiber pollution by 25%.
This was all to prop up its responsible brand image, and France found no evidence to support those equal claims.
There was no verified source, nor was there a third-party verification.
So Shein will be penalised with a €40 million fine, which is the biggest France has ever handed out for misleading consumers. Shein stated that it fixed its issues by May 2023 after being officially notified.
Shoppers caught in the mix.
According to the DGCCRF (France’s consumer watchdog), Shein displayed discounts that were either misleading or entirely fabricated for over half of the products reviewed.
In 2023, the European Commission launched coordinated enforcement against the following: Shein, Temu, Wish and AliExpress, accusing them of very similar practices, including:
Displaying “limited time” offers without timers.
Inflating reference prices to exaggerate discounts.
Using pressure tactics like “Only 3 left!” without stock transparency
These tactics are effective because research published by the OECD shows that urgency-based marketing can increase conversion rates, particularly among younger users. However, if the urgency is based on manipulated data, it crosses into illegality under EU consumer law.
For consumers, it’s often impossible to spot because the prices change quickly, the terms are relatively vague, and few shoppers check pricing history.
What makes this case significant is that it shows one of the world’s largest e-commerce platforms being held to account, not for faulty products, but for how it frames its deals. That’s new territory. And it could open the door to more regulation across the EU.
Shein’s unverified claims
Shein promoted itself as a responsible company, claiming a 25% reduction in greenhouse gas emissions, as well as limited microfiber pollution. However, investigators from DGCCRF followed through by requesting supporting documentation, which was not provided. There was no third-party verification or published methodology, and no accessible audit.
In 2023, the European Commission warned Shein and other platforms that vague terms like eco-friendly, carbon aware, and even low impact would be scrutinised unless they are tied to verifiable data.
The EU Parliament approved the Green Claims Directive, which requires all environmental marketing statements to be based on independently validated evidence before being published.
This comes across as a message of old-fashioned fast fashion sustainability, as the brands can no longer sprinkle eco language across their websites and call it a value shift.
The days of vague green talk are ending, especially in markets like France, where regulators are not treating false climate claims the same way they treat fake discounts as consumer fraud.
The EU’s crackdown
France’s €40 million fine may be the largest of its kind, but it’s part of a growing deliberate strategy that Europe is implementing to bring fast fashion platforms under tighter control, especially those that are currently based outside the EU but operate within it.
And the timing couldn’t be worse. Shein is preparing for a Hong Kong stock market debut as soon as this year. But for investors, stories like this raise questions. How stable is the business model? Can it continue to grow under new European rules? What happens if other countries decide to act next?
The era of moving fast and ignoring the rules is coming to an end, at least in Europe. This could be the first of several cracks in a model that’s relied on staying one step ahead of oversight. This case illustrates that marketing the promise of a green, ethical, and affordable brand isn’t always as it seems.
The damage affects its image, especially as younger generations become increasingly critical of the origins of their clothes and the methods used to produce them. It’s whether the rest of the industry is watching — and who might be next.