France Hits Shein with €40 Million Fine for Fake Pricing

The Price Manipulation Scheme

France’s competition agency spent nearly a year investigating Shein’s pricing practices and found some pretty damning evidence. The company was raising prices just before cutting them to create the illusion of massive discounts.

The numbers tell the story. Of all advertised discounts checked, 11% were actually price increases. In 57% of cases, Shein’s “promotions” offered no price reduction at all. Another 19% had price drops that were much smaller than advertised.

“These practices of greatly discounted prices and permanent promotions give consumers the impression they’re getting a great deal,” said France’s DGCCRF competition office.

The China-founded retailer didn’t fight the penalty, accepting the €40 million fine with backing from the Paris prosecutor’s office. Shein said it implemented corrective measures within two months of learning about the March 2024 investigation.

The company claimed it takes legal obligations in France “very seriously” and remains committed to transparency.

Despite ongoing controversies, Shein has seen explosive growth in France since launching there in 2015. The company’s market share in domestic clothing and footwear jumped from 2% in 2021 to 3% last year – significant growth in a fragmented market.

This growth comes even as Shein faces criticism for environmental pollution, unfair competition, and poor working conditions throughout its supply chain.

The fine represents France’s latest move against fast fashion practices. The French Senate recently adopted legislation specifically targeting the fast fashion industry, showing regulators are taking a harder line on “ultrafast fashion” business models.

Shein has become a lightning rod for criticism of the entire ultrafast fashion sector, which produces cheap clothing at unprecedented speed and scale.

What This Means for E-commerce

This penalty sends a clear message that European regulators won’t tolerate deceptive pricing practices, even from major international platforms. The €40 million fine is substantial enough to get attention from other e-commerce companies operating in France.

The investigation’s findings about fake discounts could influence how other retailers structure their promotional strategies. If 11% of advertised discounts are actually price increases, that suggests systematic manipulation rather than isolated incidents.

For consumers, the investigation validates concerns about whether those “amazing deals” are actually deals at all. The practice of raising prices before sales to create artificial discounts isn’t new, but regulators are taking it more seriously.

The €40 million penalty might be significant for sending a message, but it’s unclear whether it will meaningfully change Shein’s business practices or slow its European expansion. The company’s growth suggests consumers remain attracted to low prices, even amid ongoing controversies.

French authorities have shown they’re willing to take on major international e-commerce platforms over deceptive practices. Other European regulators may follow suit as fast fashion continues growing despite environmental and ethical concerns.