It started with the French consumer watchdog’s discovery that the Chinese marketplace Shein was selling child-like sex dolls and weapons.
Although Shein withdrew the illegal products, the scandal has spread to the rest of Europe, tarnishing the entire e-commerce industry, which now fears a regulatory crackdown. Proposed Europe-wide customs reforms risk raising prices for consumers, expanding marketplace liability and undercutting the European Union’s promise to decrease the regulatory burden on tech firms.
The US faces similar challenges in dealing with Chinese e-tailers. It recently ended the De Minimus tariff exemption for goods worth $800 or less to enter the US tariff-free. American shoppers must now pay duties for the first time, often in amounts far higher than they expected.
A flood of ultra-low-cost imports, particularly from China, sparked the conflict. Between February and July of this year, Shein added more than 15 million European shoppers, bringing its customer base to 145.7 million monthly European users. Chinese e-commerce platforms last year sent an unprecedented 4.6 billion ultra-cheap parcels to Europe.
Low prices attract customers – and complaints. Critics accuse Shein of using forced labor and child labor. France’s consumer watchdog DGCCRF recently revealed that not just Shein, but also other e-commerce marketplaces, including AliExpress, Temu, Wish, Joom, eBay, and even Amazon hosted illegal products, from child-like sex dolls and brass knuckles to machetes.
France has long been at the front lines of the fight against e-commerce. In 2021, the government banned the US retailer Wish for more than a year due to serious breaches in product safety compliance. Since then, the French Chamber of Commerce has been pressing the government to crack down on international e-commerce platforms such as those based in China, arguing that they threaten domestic retailers.
Brussels is rushing to respond. It has opened its own investigation into Shein. The Digital Services Act (DSA) gives the European Commission tools ranging from fines to outright bans on digital platforms for repeated violations of hosting illegal content. But in practice, enforcement has been slow: preliminary European investigations into Shein and Temu have been ongoing for months, with no clarity on when (or whether) sanctions will follow.
The European Commission has also proposed an ambitious customs reform. It would eliminate the bloc’s De Minimus tax-free exemption on the importation of packages under €150. A flat €2 handling fee would be imposed on all packages arriving from outside the bloc. Bulk shipments routed to EU warehouses would face a reduced €0.50 per item charge.
The revamp still needs sign-off from the European Parliament and EU governments. Although the full package is likely to take effect only in March 2028, negotiations have proceeded faster than expected, and a political deal could be reached as early as mid-December.
In the meantime, France is moving forward by itself. It has announced plans for its own national handling fee. The National Assembly voted for a new handling fee as part of the national budget, and is even considering going one step further, adding an additional €5 environmental footprint levy, which could rise to €10 per package by 2030. Marketplaces would become responsible for collecting the money.
France’s unilateral moves are sparking fears of undermining Europe’s single market. Without an EU-wide handling fee, marketplaces will be able to divert deliveries from China through other countries, principally Belgium and the Netherlands, which are home to Europe’s two largest ports.
Marketplaces also fear French pressure will erode their liability protections, essential for European e-commerce as well as foreign marketplaces. Under the DSA, they are liable for removing illegal content only when informed of its presence. If marketplaces are made responsible for collecting customs duties and preventing dangerous products from ever appearing on their sites, a group of mostly European marketplaces warned that they would be forced to drastically limit their number of sellers or even shut up shop.
Despite the government pressure, consumers are voting with their wallets in favor of e-commerce. More than 51 million French people, 80% of the total population, visit the country’s top 20 e-commerce sites each month, and the fastest-growing platforms are Chinese: Temu’s daily audience has grown by 179% in just two years, and Shein now attracts 19.5 million monthly French visitors. Consumers choose the platforms that offer the lowest prices.
The Shein case underlines a central dilemma facing European policymakers. In recent months, they have bemoaned the continent’s faltering competitiveness and vowed to simplify complex tech regulations. Yet unilateral moves to curb e-commerce risk forcing consumers to buy high-priced local goods, stifling competition and adding to the regulatory burden.
William Echikson is a non-resident Senior Fellow at the Center for European Policy Analysis and editor of its Bandwidth blog.
Maria-Doriana Gheorghe is an intern with the Tech Policy program at the Center for European Policy Analysis. She is completing a master’s in public policy at Sciences Po in Paris.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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