An indication hangs exterior of the Shein warehouse on November 29, 2023 in Whitestown, Indiana.
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The chair of a powerful House committee is drilling down on Shein’s data privateness practices and its relationship with the Chinese Communist Party because the fast-fashion big strikes nearer to a U.S. IPO.
Reps. Cathy McMorris Rodgers, a Washington Republican who leads the House’s Committee on Energy and Commerce, despatched a letter to Shein on Wednesday asking about the person data it collects and the communications it has had with the Chinese authorities. Rep. Gus Bilirakis, R-Fla., who chairs the panel’s Subcommittee on Innovation, Data and Commerce, co-signed the letter.
The lawmakers despatched related missives to TikTok, Temu and Alibaba.
“Media reviews point out that Chinese-owned e-commerce marketplaces are more and more well-liked within the western world. This is a critical danger for e-commerce, client security, and folks’s data privateness and safety,” the letter states. “The rise in reputation of apps and marketplaces like, TikTok, TaoBao, Pinduoduo, Temu, Alibaba, AliExpress, and Shein, has resulted in sharp public scrutiny concerning the enterprise practices of these corporations.”
In response, a Shein spokesperson informed CNBC it has obtained the committee’s letter “and can be offering a response.”
Shein has obtained quite a few letters from members of Congress and local lawmakers throughout the nation about the use of compelled labor in its provide chain, and it’s already dealing with intense scrutiny from public officers who’re involved the retailer is skirting U.S. laws. However, Wednesday’s letter from McMorris Rodgers and Bilirakis differs in each its focus and its chew.
While the letter touched on Shein’s use of compelled labor, it targeted totally on data privateness. Contrary to some of the opposite elected officers and committees scrutinizing Shein, the Energy 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 data safety practices it requires from its third-party distributors and repair suppliers and whether or not it collects biometric, genetic and different well being data 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 will possibly “unequivocally state” that its provide chain is free of compelled labor.
Earlier this 12 months, when requested whether or not it shops U.S. data in China, Shein informed CNBC that data is saved inside Microsoft and Amazon’s cloud companies “in data facilities and areas situated inside the United States.”
However, lawmakers are nonetheless involved that data on U.S. shoppers can find yourself within the arms of the Chinese authorities. While Shein insists that it is a world firm that was based in China, the majority of its provide chain is predicated within the area, and it might be topic to Chinese legislation.
“From 2014 to 2017, the Chinese Communist Party (CCP) handed a number of legal guidelines requiring all Chinese tech corporations to permit CCP officers entry to person data. Further, all Chinese tech corporations should comply with the calls for of the CCP, which in some circumstances is a ‘require[ment] to construct [their] networks in such a approach as the place the Chinese authorities has entry,'” the letter states. “Past violations by TikTok, and different Chinese-owned functions, to guard person data, and China’s file of accessing Americans’ data, undercuts any declare of data safety.”