Italy's competition watchdog, the Autorità Garante della Concorrenza e del Mercato (AGCM), has levied a hefty €1 million fine against global fast fashion giant Shein for making unfounded environmental claims. This action underscores a growing intolerance among regulators for misleading advertising, especially concerning sustainability practices.

The AGCM's investigation unveiled that Shein falsely advertised the recyclability of its clothing and misrepresented the environmental benefits of its so-called "green" fibers and other "sustainable" materials in certain product lines. Furthermore, Shein's commitment to reducing greenhouse gas emissions by 25 percent by 2050 was called into question. The regulator highlighted that the company's emissions had actually increased between 2023 and 2024, and criticized Shein for not having a robust plan to achieve these emission reduction targets.

In response to the ruling, Shein has expressed its intention to revise its environmental claims to ensure clarity, verifiability, and compliance with regulatory standards. This statement was made public through various news outlets, including Reuters.

The legal framework for this fine is grounded in EU Directive 2005/29/EC, which mandates that EU national governments regulate and penalize misleading commercial practices, including those that falsely present companies as environmentally friendly. This follows a previous €40 million fine imposed by France in July for similar deceptive practices by Shein, signaling a potentially tougher regulatory environment for the company across Europe.

The AGCM initiated its probe into Shein's practices in September of last year. Given Shein's extensive online operations throughout the EU, further penalties from other countries might be forthcoming if similar misleading environmental claims are identified. This case continues to develop as EU member states increasingly enforce stringent measures to combat greenwashing and protect consumer interests.