Paris appeals court rejects France's attempt to suspend Shein's marketplace

By Helen Reid

PARIS, March 19 (Reuters) - France's bid to suspend Chinese online retailer Shein’s marketplace was rejected by Paris' Court of Appeal on Thursday, a win for the fast-fashion giant after a scandal over sex dolls resembling children found for sale on its site.

The French state initially pushed for a total ban of Shein's site, but later walked that back to a suspension of its marketplace. A December court ruling had already rejected the government's request, but the government appealed.

Shein, which sells clothes, gadgets, and accessories at rock-bottom prices and has won over millions of cash-strapped shoppers around the world, has been under pressure in France since November when the consumer watchdog found the sex dolls as well as banned weapons for sale, prompting the government's legal action.

Shein sells its own branded clothes on its site but also has a vast marketplace where third-party sellers list products spanning everything from kitchen appliances to smartphones. It suspended its marketplace in France after the findings, reopening it only after the December ruling.

"The appeals court confirmed the [December] judgment in all its dispositions, and rejected the other demands presented by the State," the court said in a statement.

The court upheld the earlier ruling that Shein may not sell such products on its marketplace again without adequate age-verification measures.

SHEIN IS ROLLING OUT AGE-VERIFICATION MEASURES

Since the findings in France, Shein no longer allows third-party sellers to list sex dolls in any of its markets, and is rolling out age-verification measures for other products, a Shein spokesperson said.

Shein said in a statement after Thursday's ruling: "Over the last several months, we have continued to significantly reinforce our controls for both sellers and products on our marketplace, to ensure that our consumers in France can enjoy a safe and enjoyable online shopping experience."

The company said it has maintained a "close dialogue" with French and European authorities, and is engaging with the European Commission on age-verification measures "being gradually rolled out across a number of markets globally".

The European Union last month opened a formal investigation into Shein over illegal products and the platform's potentially addictive design, under the bloc's Digital Services Act.

Despite the court ruling, Shein is still likely to face government pressure in France. The country's minister for small and medium-sized businesses last month said online retailers like Shein will face a "year of resistance", saying the platform benefits from unfair competition with European retailers.