Arabic version: شي إن تكشف عن تحقيق من لجنة التجارة الفيدرالية في ملف طرح هونغ كونغ

According to Cnbc, Shein disclosed in documents tied to its planned Hong Kong initial public offering that its U.S. business is under investigation by the Federal Trade Commission. The Chinese-founded fast-fashion company did not state what the FTC is examining, and the disclosure appears to be the first public acknowledgement of the probe.

In a filing with the entity that operates the Hong Kong Stock Exchange, Shein said it was actively cooperating with the FTC. The company said it may reach a settlement in connection with the investigation but could not predict either the likely outcome or its timing. It also said it could not rule out an outcome in the near term.

Shein warned that the investigation’s outcome, through a settlement or otherwise, could require significant monetary payments. Such payments could have a material adverse effect on its financial condition and operating results, the company said. The FTC declined to comment, while Shein did not return CNBC’s request for additional information.

The FTC is the leading U.S. consumer-protection agency and works to stop deceptive or unfair business practices. Its past investigations have involved matters including hidden fees, misleading prices, shipping and refund practices, privacy and data issues, and the suppression of negative reviews. The agency also focuses on “dark patterns,” including tactics such as pre-checked boxes, difficult-to-read disclosures and confusing cancellation policies. Shein’s app uses countdown timers, gamified discounts and flash sales; the FTC cited countdown timers generally as a common dark pattern in a 2022 report. Shein’s Hong Kong listing has been approved, though the start of trading remains unclear.