Internet-based, fast-fashion purveyor Shein has come under fire from France’s data protection authority, resulting in a fine of 150 million euros ($175.61 million USD) for the company’s misuse of cookies. This decision has been contested by Shein, who plans to appeal.
The Commission Nationale de l’Informatique et des Libertés (CNIL), a government entity responsible for ensuring consumer data protection, condemned Shein’s website for its failure to abide by regulations. The issue at hand was the collection of consumer data without their explicit consent.
During a test conducted in August 2023, the CNIL found that even as users of Shein’s French site opted out of cookies – small files utilized by websites and advertisers to identify individual users and track their online activity – the cookies were still present on the user’s computer.
According to the European Union’s General Data Protection Regulation, cookies are categorized as personal data due to their ability to identify customers and target them with advertisements. Websites are obligated to secure consent to use these cookies.
The CNIL stressed that the hefty fine was a reflection of Shein’s multiple violations. The company was found to be depositing cookies without user permission, ignoring user choices, and failing to provide adequate information.
Contributing to the size of the penalty was also Shein’s significant reach, with the CNIL pointing out that 12 million French residents visit the site monthly.
Shein has pushed back against the CNIL’s actions, voicing their intention to file an appeal. The company described the fine as “wholly disproportionate” considering the nature of the purported issues, their current compliance, and the proactive steps they’ve taken towards correction.
The company stressed that they’ve been fully cooperative with the CNIL since August 2023, and have bolstered all facets of their data protection procedures.
Founded in China and headquartered in Singapore, Shein suggested that the fine was political in nature, rather than the result of a fair and balanced enforcement.
Shein, known for its affordable fashion items, has faced backlash in France, where legislators have supported a proposed law to regulate fast-fashion. If this law is enforced, Shein’s advertising would be prohibited.
The 150-million-euro fine represents approximately 2% of the 7.684 billion euros revenue reported by Shein’s Ireland-registered entity in Europe in 2023, the most recent year for which data is available.
What was Shein fined for?
Shein was fined for improperly using cookies on its website, which resulted in the unlawful collection of consumer data.
Why does the size of the fine matter?
The size of the fine reflects the severity of Shein’s violations, taking into account multiple instances of non-compliance, including placing cookies without consent, not honoring user choices, and failing to adequately inform users.
What implications does this have for Shein’s operations in France?
This incident, coupled with local lawmakers’ consideration of a law to regulate fast fashion, could potentially impact Shein’s ability to advertise and operate in France.
