Italian authorities issue €1 million fine against fast-fashion retailer Shein for alleged greenwashing practices
Fast fashion company Shein has been fined €1 million by the Italian Competition Authority (AGCM) for making misleading environmental claims. This is the second fine issued to Shein by a European competition authority in just over a month, following a €40 million fine from France's antitrust agency.
The AGCM found several specific environmental claims made by Shein to be misleading or deceptive, including claims on recyclability and circular system design, the 'evoluSHEIN by design' collection, greenhouse gas emissions reduction targets, and general messaging on environmental sustainability and social responsibility.
Shein promoted a circular system aimed at waste minimization and claimed products were recyclable, but these statements were found to be false or confusing given the fibers used and recycling systems available. The 'evoluSHEIN by design' collection was marketed as made using more sustainable and responsible manufacturing with "green fibers," but the full environmental benefits throughout the product life cycle were not demonstrated.
Shein claimed it aimed to reduce emissions by 25% by 2030 and reach net zero by 2050. However, the AGCM deemed these statements vague, generic, and contradicted by Shein's actual increase in greenhouse gas emissions in 2023 and 2024, undermining their credibility. General messaging on environmental sustainability and social responsibility sections were described as sometimes vague, generic, overly emphatic, or omissive, which misled consumers about the true environmental impact.
The fine was issued to Infinite Styles Services Co. Limited, a Dublin-based company managing Shein's website in Europe. Shein accepted the fine and stated it had already taken steps to rectify the breaches after being notified by the regulator last year.
Shein's revenue in the first quarter was almost $10 billion (€8.6bn), and its net income rose over $400 million (€346mn). Despite the fine, the company has confidentially filed for an initial public offering (IPO) in Hong Kong due to the hold up in London. Shein's ambitions to launch an IPO in London have been stalled due to disagreements with Chinese and UK regulators over risk disclosures, particularly concerning human rights abuses.
The European Commission has opened probes related to Shein's potential violations of EU consumer protection rules and the Digital Services Act. The DGCCRF, the French antitrust agency, conducted an 11-month investigation into Shein's practices. No response was received from Shein regarding a request for comment on the above matters.
[1] AGCM Press Release [2] Reuters Article [3] Financial Times Article [4] Bloomberg Article [5] BBC News Article
- The AGCM's fine towards Shein emphasizes the importance of technological advancements and innovation in aligning marketing claims with actual practices in the realm of lifestyle products, especially within the context of general-news stories focusing on environmental sustainability and social responsibility.
- Amidst concerns over questionable environmental claims made by fast fashion brands and increasing scrutiny from European competition authorities, the sports and weather updates on today's news may seem less pertinent, given the broader implications of technology's role in shaping consumer behavior and corporate accountability.
