Shein grilled on China relationship, information privateness forward of IPO

The chair of a powerful House committee is drilling down on Shein’s information privateness practices and its relationship with the Chinese language Communist Get together because the fast-fashion big strikes nearer to a U.S. initial public offering. 

Reps. Cathy McMorris Rodgers, a Washington Republican who leads the Home’s Committee on Vitality and Commerce, despatched a letter to Shein on Wednesday asking in regards to the consumer information it collects and the communications it has had with the Chinese language authorities. Rep. Gus Bilirakis, R-Fla., who chairs the panel’s Subcommittee on Innovation, Knowledge and Commerce, co-signed the letter.

The lawmakers despatched comparable missives to TikTok, Temu and Alibaba. 

“Media reports indicate that Chinese-owned e-commerce marketplaces are increasingly popular in the western world. This is a serious risk for e-commerce, consumer safety, and people’s data privacy and security,” the letter states. “The rise in popularity of apps and marketplaces like, TikTok, TaoBao, Pinduoduo, Temu, Alibaba, AliExpress, and Shein, has resulted in sharp public scrutiny regarding the business practices of these companies.” 

In response, a Shein spokesperson instructed CNBC it has obtained the committee’s letter “and will be providing a response.” 

Shein has obtained quite a few letters from members of Congress and local lawmakers throughout the nation about using pressured labor in its provide chain, and it’s already going through intense scrutiny from public officers who’re involved the retailer is skirting U.S. laws. Nevertheless, Wednesday’s letter from McMorris Rodgers and Bilirakis differs in each its focus and its chew. 

Whereas the letter touched on Shein’s use of pressured labor, it targeted totally on information privateness. Opposite to among the different elected officers and committees scrutinizing Shein, the Vitality and Commerce committee has extra heft in its mandate to deal with points associated to client protections and international commerce.

The letter asks Shein what information safety practices it requires from its third-party distributors and repair suppliers and whether or not it collects biometric, genetic and different well being information from customers. The lawmakers additionally requested whether or not the corporate collects data on shoppers’ non secular and political views. 

The letter questioned whether or not Shein agrees that genocide is going on in China’s Xinjiang area, primarily towards the Uyghur ethnic group, and if it might “unequivocally state” that its provide chain is freed from pressured labor. 

Earlier this yr, when requested whether or not it shops U.S. information in China, Shein instructed CNBC that data is saved inside Microsoft and Amazon’s cloud companies “in data centers and regions located within the United States.”

Nevertheless, lawmakers are nonetheless involved that information on U.S. shoppers can find yourself within the arms of the Chinese language authorities. Whereas Shein insists that it is a international firm that was based in China, the majority of its provide chain relies within the area, and it could possibly be topic to Chinese language legislation. 

“From 2014 to 2017, the Chinese Communist Party (CCP) passed several laws requiring all Chinese tech companies to allow CCP officials access to user data. Further, all Chinese tech companies must comply with the demands of the CCP, which in some cases is a ‘require[ment] to build [their] networks in such a way as where the Chinese government has access,'” the letter states. “Past violations by TikTok, and other Chinese-owned applications, to protect user data, and China’s record of accessing Americans’ information, undercuts any claim of data security.” 

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