On February 17, 2026, the European Union launched one of its most consequential investigations under the Digital Services Act (DSA).
The target is not just what Shein sells but how its app is designed to influence behavior.
This is the first time the EU has used the full power of the DSA to challenge the “psychology” of a shopping platform. The case signals a major shift: online shopping addiction is now being regulated with the same seriousness as social media addiction.
Why This Case Is Different
Under the DSA, Shein is classified as a “Very Large Online Platform” (VLOP). That designation triggers strict obligations to manage systemic risks to users’ safety, mental health, and consumer rights.
The European Commission is not merely asking for small fixes.
It is examining whether Shein’s business model itself complies with EU law.
At stake are fines of up to 6% of global annual turnover and potentially forced structural redesigns of the app for European users.
1. The “Addictive Design” Allegation
The most modern and controversial element of the investigation concerns gamification.
Shein’s app includes:
- Daily check in rewards
- Points and badges
- Limited time bonuses
- Engagement “streaks”
Regulators argue that these features may create compulsive shopping behavior, particularly among younger users. Under the DSA, platforms must mitigate systemic risks to users’ physical and mental well being.
This mirrors the EU’s recent preliminary action against TikTok over infinite scroll and autoplay features. By targeting Shein, the EU is establishing that addictive engagement mechanics are not limited to social media they also apply to commerce.
If Shein cannot prove these features are harmless, it may be forced to remove them entirely in the EU market.
2. Illegal and Unsafe Products
The most serious allegations involve illegal goods but the issue goes beyond extreme or sensational items.
In late 2025, French authorities flagged the presence of child like sex dolls and restricted weapons such as machetes on the platform. These findings triggered immediate scrutiny under the Digital Services Act.
However, the Commission’s investigation is not limited to criminal products. Regulators are also examining reports of:
- Unsafe toys that may pose choking or chemical hazards
- Non compliant electronics, including chargers that fail to meet EU safety and CE certification standards
- Products that do not satisfy EU consumer protection and product safety rules
This significantly broadens the scope of the case. The concern is not only about rare or extreme items, it is about everyday consumer goods that millions of Europeans purchase.
Under the DSA, online marketplaces must operate effective “notice and action” systems. That means illegal or unsafe products must be removed quickly and prevented from reappearing. For a platform operating at Shein’s scale, this requires automated detection systems, strong seller verification, and rigorous product compliance checks.
The Commission’s position is direct: illegal or unsafe goods are prohibited whether they are sold in a physical store or through a digital marketplace.
If Shein’s filtering and moderation systems are found structurally inadequate, penalties could escalate beyond fines. Individual member states have already indicated that market suspension remains a last resort option if systemic risks persist.
3. The Algorithmic “Black Box”
Shein’s recommendation engine is central to its success. The platform adds thousands of new products daily, and its algorithm determines which users see which items.
The EU is demanding:
- Clear disclosure of the main parameters behind product recommendations
- An easily accessible option to browse without algorithmic profiling
The DSA guarantees users a right to opt out of personalized recommendation systems. Regulators suspect Shein may have made that option too difficult to find.
This requirement strikes at the core of the platform’s growth engine. If algorithmic profiling becomes optional or less effective engagement and sales patterns could change significantly.
4. Consumer Protection and Sales Tactics
Beyond safety and psychology, the Commission is also examining consumer law compliance.
The probe includes scrutiny of:
- Artificial “slashed prices” not based on real historical pricing
- Fake scarcity messages (“Only 2 left!”)
- Misleading countdown timers
- Unclear return and refund policies
These practices, if verified, would violate EU consumer protection standards.
The message is clear: behavioral manipulation in digital retail is now under regulatory oversight.
Shein’s Response: Calculated Cooperation
Shein has adopted a markedly cooperative tone.
In a formal statement, the company said it shares the Commission’s goal of ensuring a “safe and trusted online environment” and pledged to engage constructively in the procedure.
This approach contrasts sharply with the confrontational stance taken by X in its disputes with EU regulators.
Shein’s defense strategy includes:
- Claiming it removed flagged illegal products immediately
- Banning all sex dolls globally
- Terminating over 260 non compliant sellers
- Conducting more than 2 million product safety tests
- Investing $15 million in expanded compliance and testing systems
- Deploying new age assurance tools for minors
The company is also working closely with Ireland’s media regulator, Coimisiún na Meán, which oversees parts of DSA enforcement.
The IPO Factor
Shein’s cooperative posture is not accidental.
The company is preparing for a major initial public offering (IPO), potentially in London or the United States. Open regulatory conflict with the EU would significantly weaken investor confidence.
Investors prioritize regulatory stability. A company facing potential market suspension in Europe where Shein reportedly has around 145 million users carries material risk.
This creates a strategic dilemma:
- Keep gamified features and risk fines or bans.
- Remove them and potentially reduce sales growth ahead of the IPO.
Unlike social media platforms that monetize attention, Shein sells physical goods. Losing access to the EU market would directly impact revenue and logistics. A fashion company blocked from Europe is not just losing users it is losing distribution capacity.
A Broader Shift in Digital Regulation
This investigation marks a broader transition in how digital markets are governed.
Three key signals emerge:
- Behavioral design is now regulated.
- Algorithmic transparency is enforceable.
- Online marketplaces are accountable for physical world harm.
The EU is effectively redefining platform responsibility. It is no longer sufficient to remove illegal content after the fact. Platforms must design systems that prevent systemic harm before it scales.
What Comes Next
The Commission can impose:
- Fines of up to 6% of global annual turnover
- Interim measures requiring immediate design changes
- In extreme cases, partial or national suspensions
The investigation could take months, but its implications are immediate. Other global marketplaces are watching closely.
If the EU succeeds in forcing structural changes to Shein’s app design, it could establish a precedent that reshapes digital retail worldwide.
The Future of Online Shopping
This case signals that “shopping addiction” is no longer treated as a marketing success metric. It is now a regulatory risk.
The deeper question is whether digital commerce can remain hyper personalized and growth driven without relying on behavioral nudges that regulators view as manipulative.
If the EU’s interpretation of the DSA holds, the future shopping app may look less like a game and more like a transparent marketplace.
For platforms operating at global scale, the message is clear: growth strategies built on psychological engagement must now survive legal scrutiny.
The era of unregulated digital persuasion is ending.

