Italian regulator hits Shein with 1 million euro greenwashing fine

By Alvise Armellini

ROME (Reuters) -Italy's competition authority (AGCM) imposed a 1 million euro ($1.16 million) fine on China-founded fast fashion online retailer Shein on Monday for misleading customers on the environmental impact of its products.

This is Shein's second financial sanction by a European competition authority in little more than a month, after France fined the company 40 million euros on July 3 over fake discounts and misleading environmental claims.

The Italian fine was imposed on Infinite Styles Services Co. Limited, a Dublin-based company that operates Shein's website in Europe, following a "greenwashing" investigation by AGCM launched last September.

Shein did not immediately respond to a request for comment.

AGCM said the environmental sustainability and social responsibility messages on Shein's website "were sometimes vague, generic, and/or overly emphatic, and in other cases omitted and misleading."

Shein's claims on circular system design and product recyclability "were found to be false or at the very least confusing", and the green credentials of its 'evoluSHEIN by design' collection were overstated, the regulator said.

Shein promotes the 'evoluSHEIN by design' collection as clothes made using more sustainable and responsible manufacturing.

AGCM said consumers could be misled to think that the collection was made with eco-friendly materials and fully recyclable, "a fact that, considering the fibres used and currently existing recycling systems, is untrue".

The authority also took issue with Shein's "vague and generic" commitments to cut greenhouse emissions by 25% by 2030 and to net zero by 2050, noting they contradicted its increase in emissions in 2023 and 2024.

The Italian regulator said its overall assessment was influenced by an "increased duty of care" falling on Shein, "because it operates in a highly polluting sector and with highly polluting methods" such as fast and super-fast fashion.

AGCM is in charge of consumer protection as well as competition.

When AGCM's investigation was launched last year, Shein said it was "ready to cooperate openly with relevant Italian authorities, providing the necessary support and information to address any inquiries".

Founded in China, Shein is known for its cheap tops and dresses. Its treatment of workers and environmental record came under increased scrutiny last year after reports that it was planning to list its shares in London.

($1 = 0.8642 euros)

(Reporting by Alvise Armellini, additional reporting by Helen Reid in London, editing by Cristina Carlevaro and Susan Fenton)