On 17 February 2026, the European Commission opened formal proceedings against Shein, designated as a Very Large Online Platform (VLOP) under the Digital Services Act (DSA). The initiative falls within the framework of the supervisory powers conferred on the Commission to verify compliance with the obligations imposed on large digital platforms, in particular with regard to the circulation of illegal and counterfeit products within online marketplaces. Among the issues under examination is the possible presence on the platform of goods infringing intellectual property rights, including trade marks, designs and copyright. Shein was formally designated as a VLOP by the European Commission in October 2023.

2. DSA Obligations Concerning Illegal Products and IPR

The Digital Services Act introduces a system of responsibility and due diligence for online platforms, directly affecting the circulation of counterfeit products as well. The DSA replaces the previous intermediary liability regime established by the E-Commerce Directive (2000/31/EC), significantly strengthening the obligations placed on platforms.

The most relevant obligations include:

a) Notice-and-action mechanisms (Art. 16 DSA): platforms must establish systems enabling rights holders to easily report illegal content or products, including items that infringe intellectual property rights. The system must be easily accessible, equipped with a direct electronic channel, and capable of allowing sufficiently precise reports. The platform is required to communicate its decision to the reporting party, with an obligation to provide reasons in the event of a refusal.

b) Trader traceability (Art. 30 DSA): marketplaces must collect and verify information on professional sellers operating on the platform — including business name, VAT number and bank details — in accordance with the "Know Your Business Customer" (KYBC) principle, with a view to reducing the presence of operators selling counterfeit products. Sellers who have not provided the required information or whose verification has failed may not operate on the platform.

c) Enhanced obligations for VLOPs (Arts. 34–35 DSA): very large online platforms must: i) assess systemic risks, including the spread of illegal products, on an annual basis; ii) adopt mitigation measures, such as more effective control systems and enhanced moderation; iii) undergo independent audits of compliance with the measures adopted (Art. 37 DSA).

d) Transparency and data access: VLOPs must provide information on how their systems operate and on the measures taken to counter illegal content and products, as well as share data with the Commission and authorised researchers (Arts. 40–42 DSA).

3. The Focus of the Investigation: Counterfeit Products

With specific regard to Shein's activity as a third-party marketplace, the Commission's investigation concerns in particular the possible inadequacy of the measures adopted by the platform to: prevent third-party sellers from selling products that infringe registered trade marks or designs; promptly remove items reported as counterfeit through notice-and-action mechanisms; ensure the traceability and proper identification of third-party sellers pursuant to Art. 30 DSA.

In this context, the DSA serves as a complementary instrument to traditional IP rights enforcement, since it does not target the individual act of counterfeiting carried out by the third-party seller, but rather the governance of the platform that enabled the commercialisation of such goods.

4. Possible Consequences of the Investigation

Should the Commission find violations of the Digital Services Act, it could impose:

• corrective measures to strengthen the platform's control systems (modification of notice-and-action systems, enhanced seller verification, periodic reporting obligations);

• fines of up to 6% of the company's annual global turnover (Art. 74 DSA);

• periodic penalty payments of up to 5% of average daily turnover for each day of non-compliance;

• in cases of serious and repeated infringement, interim measures and, as a last resort, temporary suspension of access to the service in the EU (Art. 76 DSA).

   

5. Conclusions

The investigation into Shein provides a significant opportunity to reflect on the role that the Digital Services Act may play, indirectly, in the enforcement of intellectual property rights in the digital economy.

The DSA strengthens the procedural responsibility of online platforms, imposing more stringent due diligence obligations in the management of potentially counterfeit products. This represents a step forward compared to the previous regime, but it does not eliminate the structural difficulties of IP enforcement in the digital context: the fragmentation of supply chains, the speed with which dishonest sellers reconstitute themselves under new identities, and the complexity of verification at a global scale remain open challenges.

For rights holders, the mechanisms introduced by the DSA — in particular notice-and-action and trader traceability — offer additional protective tools, which complement rather than replace traditional IP remedies. The practical effectiveness of these tools will depend, however, on actual implementation by platforms and on the rigour with which the Commission exercises its supervisory powers.

The outcome of the investigation into Shein will provide valuable guidance on the practical scope of the DSA in this area, but it is premature to regard it as a consolidated model: this is one of the first enforcement cases against a VLOP, and regulatory practice is still taking shape.

As a professional with an extensive track record in the telecommunications and ICT sector, Antonio Corda has gained significant experience in national and international contexts, holding executive positions in legal, compliance, privacy, regulatory affairs and security in companies in the ITC and telecommunications sectors: most recently, Chief Legal, Compliance & Security Officer at Fastweb+Vodafone.

In his new role, Antonio will work with ADVANT Nctm teams involved in M&A transactions and commercial projects in the telecommunications and ICT sector, both in the retail and infrastructure segments. 
Paolo Montironi, Senior Partner at ADVANT Nctm, said: “We are delighted to welcome Antonio to our firm. His expertise in the TMT sector and in compliance and cybersecurity is a valuable asset for the assistance we offer to our clients in highly technological and regulatory transactions”.

"Joining ADVANT Nctm”, Corda added, “is an opportunity for me to contribute my experience in a multidisciplinary and international context, helping to develop strategic projects in the telecommunications and ICT sector”.

With this new entry, ADVANT Nctm confirms its commitment to providing specialist expertise in sectors marked by strong technological innovation, with a particular focus on regulatory, compliance, privacy and security issues.

High-Risk AI systems under the EU AI Act In a employment context, the new regulation concerns foremost:
a) AI systems intended to be used for the recruitment or selection of natural persons, in particular to place targeted job advertisements, to analyze and filter job applications, and to evaluate candidates. 
b) AI systems intended to be used to make decisions affecting terms of work-related relationships, the promotion or termination of work-related contractual relationships, to allocate tasks based on individual behavior or personal traits or characteristics or to monitor and evaluate the performance and behavior of persons in such relationships.

The most important requirements for high-risk AI systems at a glance 

The providers of high-risk AI systems bear the following obligations: 

• Quality and risk management
• Technical documentation, record-keeping and logging obligations
• Consideration of accuracy, robustness, cybersecurity and accessibility during development
• Transparency and information obligations
• Registration in the relevant EU database and cooperation with the competent authority

Those who only deploy of high-risk AI systems generally have to fulfil fewer requirements than providers. However, there may be scenarios in which they can be subject to the same extensive obligations as the providers of high-risk AI systems.

Looking ahead, the AI Liability is poised to complement the EU AI Act. It aims to streamline legal pathways for individuals harmed by AI systems, including in employment related situations. However, the legislative process is still in its early stages and only rarely does a directive emerge from the legislative process in the form in which it was presented by the EU Commission.

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