A French administration in charge of consumer rights and fraud has investigated Wish, the mobile e-commerce platform that recently filed to go public. While the company generated $1.9 billion in revenue in 2019, the French administration believes Wish could be selling products, such as sneakers and perfumes, with images incorrectly showing the logos of famous brands.
In addition to those wrongly labeled products, the administration says Wish pretends products are on sale while they aren’t. The platform could be displaying -70%, -80% or -90% on some products even though the original price is completely made up.
The administration in charge of the investigation is the direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF), an administration that reports to the French Ministry for the Economy and Finance. They have transmitted the report to a court in Paris.
Now, it’s up to the court to decide whether the allegations are right or unfounded. “The court can subpoena Wish or offer to plead guilty. We should know in the coming days,” France’s digital minister Cédric O told me.
On Twitter, Cédric O highlighted one case in particular. “Wish already stood out during the first lockdown by selling facemasks that don’t meet safety standards. French people who are using the app to find low-cost products should know that they’ll mostly find scams,” he tweeted.
.@WishShopping s’était déjà distinguée pendant le 1er confinement en vendant des masques ne respectant pas les normes. Les Français-e-s qui utilisent l'application pour y trouver du low-cost doivent savoir qu'ils y trouveront surtout des arnaques. @alaingriset @BrunoLeMaire
— Cédric O (@cedric_o) November 30, 2020
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If Wish is found guilty, the company could risk up to 10% of its annual revenue in France. In particular, it’s going to be interesting to see whether Wish is responsible for products sold by third-party merchants.
The timing of the case is a bit odd as Europe’s upcoming Digital Services Act should overhaul the e-commerce directive from 2000. All eyes are on content moderation, but the Digital Services Act should also focus on counterfeit sellers, the liability of marketplaces and more.
Wish files to go public with 100M monthly actives, $1.75B in 2020 revenue thus far
