Shein €40M France + €1M Italy: misleading commercial practices and unproven green claims — anatomy and operational lessons

Two consecutive penalties 2024-2025

The European Union's regulatory architecture has moved beyond the administrative-warning stage to enter high-impact punitive enforcement. Between late 2024 and mid-2025, the European textile sector witnessed the materialisation of the regulatory risk inherent in "greenwashing" practices, culminating in two unprecedented coercive interventions against the Asian fast-fashion operator Shein. The chronological sequence and the magnitude of these actions —initiated by the Autorità Garante della Concorrenza e del Mercato (AGCM) in Italy and consolidated by the Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF) in France— do not represent isolated cases, but the crystallisation of a market-surveillance strategy structured under Directive 2005/29/EC (the Unfair Commercial Practices Directive or UCPD) and its imminent tightening through Directive (EU) 2024/825 (Empowering Consumers for the Green Transition or ECGT).

The focus of consumer and competition authorities on Shein responds to an intersection of critical factors that maximise the visibility of the infringement and the potential harm to consumers' economic interests. First, the fundamental asymmetry between the ultra-high-rotation production model and the sustainability claims communicated to the market. The European legislator, in the recitals of the rules under CELEX 32024L0825, clearly establishes that for the internal market to function properly it is essential that consumers be able to make informed purchasing decisions, requiring traders to provide clear, relevant and reliable information. When an operator with a massive market share floods distribution channels with generic statements relating to sustainability or circularity, the distorting effect on competition and on consumers' transactional behaviour is exponential.

Second, Shein attracts these record penalties because of the manifest disconnect between its marketing campaigns and the documentary traceability capacity of its extensive supplier network. The authorities detected a systematic breach of the principle of truthfulness regarding the main characteristics of the product, an element that Article 6 of Directive 2005/29/EC expressly classifies as a misleading commercial practice. The amendment introduced by the ECGT Directive underlines that environmental and social characteristics and circularity aspects (durability, reparability, recyclability) constitute material elements of the purchasing decision. The simultaneous action of the Italian and French agencies shows that national competition and consumer authorities are using operators of maximum commercial penetration as exemplary cases, establishing administrative and criminal precedent to discipline the entire sector before the full application of the green-transition rules.

AGCM Italy evoluSHEIN October 2024

In October 2024, the Italian competition authority (AGCM) imposed on Shein a fine of €1M (~$1.15M) specifically focused on the irregularities of its capsule collection called "evoluSHEIN". This decision marks a turning point in the legal doctrine of sustainability claims, by systematically dissecting and refuting the commercial-communication vectors used by the company. The AGCM investigation determined that the statements relating to "circular design", the use of "green fibers" and the alleged "recyclability" of the garments lacked a verifiable environmental basis, constituting a direct infringement of the provisions that prohibit misleading consumers as to the nature and the expected results of using the product.

The anatomy of this €1M (~$1.15M) penalty reveals the evidentiary standard required by European regulators. In the case of the "green fibers" claim, the AGCM invalidated the statement upon finding the absence of officially recognised third-party certifications. The European legal framework, anticipated by Directive (EU) 2024/825, expressly prohibits making a generic environmental claim in respect of which the trader cannot demonstrate recognised excellent environmental performance. Excellent performance is demonstrated through compliance with rules such as Regulation (EC) 66/2010 on the EU Ecolabel or officially recognised EN ISO 14024 labelling schemes. Shein provided neither independent audits nor traceability evidence to guarantee that the origin of those fibres measurably mitigated the environmental impact compared with the sector's usual practices.

Regarding the "circular design" and "recyclability" claims, the Italian authority applied rigorous scrutiny to the technical and operational viability of those statements at the end of the product's service life. In European consumer law, asserting that a product is recyclable when there is no real, at-scale infrastructure for the collection, separation and recycling of those specific textile blends (frequently complex polyesters and elastane) is classified as a misleading omission and a false promise of environmental benefit. The AGCM concluded that the term "evoluSHEIN" operated as a cognitive umbrella designed to alter consumer perception, capitalising on the buyer's ecological sensitivity without assuming the operational burdens that the circular economy demands. This penalty, although moderate in amount in the context of the entity's global turnover, established the evidentiary framework and the legal reasoning that would later catalyse larger-scale actions in other jurisdictions of the internal market.

DGCCRF France €40M July 2025

If the Italian decision functioned as a diagnosis of the problem, the action of the French administration was the heaviest blow. In July 2025, the Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF) imposed on Shein a penalty of €40M for continued misleading commercial practices, through a settlement endorsed by the Paris prosecutor and accepted by the company. It is worth being precise about the scope, so as not to overstate it: the bulk of the penalty related to fake discounts —57% of the promotions reviewed offered no real reduction and 11% were disguised price increases— and a part, the one of interest here, to environmental claims that the company was unable to justify. Even so, the magnitude marks a paradigm shift: both price deception and large-scale "greenwashing" cease to be treated as minor irregularities when they are structural and massively affect the purchasing decision of European consumers.

The scope of the case investigated by the DGCCRF exhibits a multidimensional anatomy. The French authorities did not confine themselves to penalising specific capsule collections, but assessed the dissonance between Shein's corporate architecture and the environmental statements issued at organisational level. French fraud inspectors determined that the company engaged in misleading commercial practices by presenting future environmental performance commitments without clear, objective, verifiable and time-bound targets. Directive (EU) 2024/825 expressly prohibits making claims relating to future environmental performance without a detailed, realistic and resourced implementation plan, regularly verified by an independent third-party expert.

The €40M penalty also reflects the application of the principle of proportionality and deterrent effect required by Union rules. The DGCCRF applied the prohibition, recently codified in Annex I of Directive 2005/29/EC, on making an environmental claim about the entire product or about the trader's entire business when, in reality, it concerns only a particular aspect of the product or a specific activity that is not representative of the business. The French investigations documented how Shein's macro advertising campaigns led consumers to perceive a comprehensive ecological transition of the operator, when the vast majority of the catalogue still relied on linear, carbon-intensive production models based on the intensive use of uncertified virgin polyester. The settlement was the route to avoid prolonged court litigation, obliging the operator to modify its sales interfaces and to remove the unsubstantiated statements in French territory.

Invalidated claim vectors

The forensic analysis of both decisions reveals an identical methodological pattern in the "greenwashing" strategies of the penalised operator and in the reasoning of the government agencies. The first vector of invalidation is documentary orphanhood in the deep tiers of the supply chain. To sustain an environmental claim, the European regulatory framework (and the imminent Proposal for a Directive on Green Claims 52023PC0166) requires that the underlying assessment include primary information available to the trader and that it cover a life-cycle perspective. The investigations showed that Shein made statements about the use of sustainable materials without holding traceability control at Tier 2 (material processing, dye houses) and Tier 3 (spinning mills, raw-material extraction) levels. Lacking the complete documentary chain makes it impossible to verify the truthfulness of the percentage of recycled or organic material, turning the claim into an act of objective deception.

The second vector systematically invalidated was the abuse of vague and generic terms without specificity. The continued use of words such as "eco-friendly", "sustainable", "conscious" or "green" in the descriptions of the items was classified as an unfair commercial practice. The rules require that every explicit environmental claim be substantiated precisely. When the trader cannot unequivocally demonstrate excellent environmental performance —for example, by obtaining the textile Ecolabel standard (Decision 2014/350/EU)— the use of these conceptual labels is strictly prohibited because of their inherent capacity to skew the transaction. Semantic vagueness ceased to be advertising licence to become the material basis of the penalty.

The third vector challenged was the claim of "recyclability" detached from industrial reality. Attributing the condition of "recyclable" to a textile product made of complex synthetic blends is legally indefensible if the trader does not prove that collection and recycling systems exist at commercial scale and available to the average consumer at the end of that garment's life cycle. The regulatory agencies argued that theoretical recyclability under laboratory conditions is not sufficient to support a commercial claim addressed to the general public. If 99% of garments end up in landfill or incinerators owing to the technical and economic incapacity of European sorting plants to process the exact composition of the product, the claim of circular design constitutes a direct inducement to error. These three vectors delineate the definitive evidentiary standard for the textile industry: the burden of proof rests entirely on the trader, who must hold scientific and documentary evidence prior to marketing.

ECGT Spain foreshadowed

The punitive actions carried out in Italy and France function as direct legal precedents that foreshadow the compliance landscape in Spain, whose deadline for transposing Directive (EU) 2024/825 (ECGT) inescapably expires on 27 Mar 2026. From that date and its mandatory application from 27 September 2026, the Spanish legal order will formally assimilate the expanded catalogue of prohibited practices through the corresponding amendment of the Consolidated Text of the General Law for the Defence of Consumers and Users (TRLGCU) and the Unfair Competition Act. Fashion brands operating in the European market will face a punitive framework identical to the one that made the historic French penalty possible.

The particularity of the Spanish market lies in its decentralised enforcement architecture. Surveillance and the exercise of sanctioning power will fall concurrently on the Directorate-General for Consumer Affairs at State level (drawing on the technical criteria of the Spanish Agency for Food Safety and Nutrition, historically AECOSAN, and other sectoral authorities), and on the Directorates-General for Consumer Affairs of the Autonomous Communities. This multiplicity of regulatory actors increases the risk of scrutiny for any brand that keeps its catalogue riddled with unfounded environmental claims. The regional authorities will have full competence to open sanctioning proceedings if they detect misleading commercial practices relating to environmental or durability characteristics in products marketed in their territories, drawing on the interpretative case law consolidated by cases such as those of the AGCM and the DGCCRF.

Following the principle of subsidiarity and cross-border cooperation stipulated in Regulation (EU) 2017/2394 on cooperation on consumer protection (the CPC Network), the decisions against Shein will accelerate ex officio actions in Spain. In the case of widespread infringements or widespread infringements with a Union dimension, Spanish national legislation must provide that the maximum amount of the fine reach at least 4% of the trader's annual turnover in the country. If the French DGCCRF managed to impose €40M through a criminal-settlement procedure for large-scale commercial fraud, the Spanish prosecutor and the administrative consumer authorities will have, post-2026, an express legal arsenal to classify as serious deception the display of sustainability labels not based on third-party certification systems or the formulation of future climate promises without independent verification.

Analytical reflection + Spain horizon

The anatomy of the penalties imposed on Shein reveals the imminent convergence of consumer-protection rules and green-transition policies in the European Union. The forensic legal analysis of the case files corroborates that institutional tolerance of information asymmetry has ended. It is imperative to draw an explicit distinction between the nature of the intervening authorities in order to grasp the magnitude of the legal risk: while AGCM Italy operated from a competition-law perspective and imposed an administrative punishment of severe warning, the DGCCRF France escalated the conflict into the realm of consumer fraud with massive criminal financial consequences. Both actions in turn differ from the preventive and advisory approach of the Norwegian NCA (Forbrukertilsynet), which in the past analysed the Higg MSI index in relation to another multinational chain (H&M, not Shein), confining itself at the time to issuing advertising-correction guidelines without reaching the confiscatory amounts we now witness.

This punitive escalation confirms that simply removing terms such as "sustainable" from physical labels is not enough to achieve compliance. The authorities require the material substrate of the environmental claim to be safeguarded by a traceable, documented and independently verified value chain. Textile brands that lack operational visibility over their Tier 2 and Tier 3 suppliers assume a critical contingent risk every time their marketing department publishes a collection categorised as "conscious" or "circular". Union directive CELEX 32024L0825 irrevocably shifts the burden of proof to the commercial operator, requiring a technical traceability that clashes head-on with the traditional opacity of textile production subcontracted in third countries.

In a regulatory environment where the omission of material information about environmental externalities is equated with active deception, compliance departments must retrospectively audit all active commercial communications. To go deeper into the legal structure of the absolute prohibitions, see Pillar 5 ECGT — Green Claims for textiles. Likewise, to understand how the Scandinavian authorities began the dissection of the industry's sustainability indices, it is essential to review the case Norwegian NCA 2022 vs H&M+Norrøna-textil). Finally, the methodological tensions over how to scientifically measure and verify these impacts are explored in the analysis of the Higg MSI v3.11 SAC→Cascale transition. The adaptation window is closing inexorably; the era of non-auditable green claims is, for all legal purposes, an unsustainable liability in the single market.