Shein’s Data Dilemma Under Congressional Spotlight

The chair of a significant House committee is escalating the investigation into Shein’s data privacy practices and its connections with the Chinese Communist Party, especially as the popular fast-fashion giant approaches its much-anticipated U.S. initial public offering.

Representative Cathy McMorris Rodgers, a Washington Republican leading the House Committee on Energy and Commerce, recently penned a letter directly to Shein, seeking in-depth information about its user data collection practices and any interactions with the Chinese government. The co-signatory of this letter is Representative Gus Bilirakis, R-Fla., who chairs the panel’s Subcommittee on Innovation, Data, and Commerce.

Parallel letters have been dispatched to TikTok, Temu, and Alibaba, reflecting growing concerns about the increasing popularity of Chinese-owned e-commerce platforms in the Western world. Lawmakers are alarmed about potential risks to e-commerce, consumer safety, and data privacy associated with the rise of apps and marketplaces such as TikTok, TaoBao, Pinduoduo, Temu, Alibaba, AliExpress, and Shein.

While Shein has previously faced inquiries related to allegations of forced labor in its supply chain, the latest letter from McMorris Rodgers and Bilirakis distinctly emphasizes the aspect of data privacy. The Energy and Commerce committee’s expansive mandate in dealing with issues related to consumer protections and foreign commerce significantly underscores the gravity of this scrutiny.

The comprehensive letter to Shein seeks detailed insights into its data protection practices with third-party vendors. It raises questions about whether the company collects biometric, genetic, and health data from users, as well as information regarding their religious and political beliefs. The lawmakers delve into the highly controversial topic of forced labor in China’s Xinjiang region, pressing Shein to acknowledge if it perceives genocide occurring in the area and to unequivocally state the absence of forced labor in its supply chain.

Despite Shein’s assurances earlier this year that U.S. data is stored within Microsoft and Amazon’s U.S.-based cloud services, lawmakers continue to express reservations about potential Chinese government access to user data. The letter points to past violations by Chinese-owned applications and China’s track record of accessing Americans’ information, casting doubt on the proclaimed data security measures.

In response to the committee’s letter, a Shein spokesperson confirmed receipt and pledged to provide a comprehensive response. As Shein navigates through a growing array of inquiries, the evolving landscape of data privacy and its intricate connections to the Chinese government thrusts the fashion giant under intensified scrutiny as it charts its course toward a U.S. IPO.

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