EU Accuses Temu of Breaking Laws with Unlawful Merchandise
European Commission Accuses Chinese Retail Giant Temu of Violating Digital Services Act
The European Commission has accused Temu, the Chinese online retail giant, of violating rules set by the Digital Services Act (DSA). In a formal investigation launched in October, the Commission found that Temu is not meeting the required standards for user risk assessment as set by the DSA.
As a "very large online platform" under the DSA, Temu is required to do more to protect European consumers online. The Commission's specific findings against Temu include failing to properly assess and mitigate the risks of illegal products being sold on its platform, such as unsafe items like baby toys and small electronics.
The Commission's investigation concluded that Temu's risk assessment was inaccurate and relied on general industry information rather than detailed insights specific to its own marketplace. This led to inadequate measures to prevent the dissemination of illegal products.
A mystery shopping exercise by the Commission found that consumers were very likely to encounter non-compliant and potentially dangerous products on Temu’s platform, highlighting a significant safety risk to EU users. With nearly 94 million average monthly active users in the EU, Temu's failure to meet the DSA requirements threatens consumer safety and undermines the EU's digital single market protections.
The Commission is continuing to investigate further suspected breaches, including the effectiveness of Temu’s mitigation measures against illegal content and products, the use of addictive or manipulative design features on Temu’s platform, the transparency and fairness of its recommendation systems, and its access to data for independent researchers to verify compliance.
If the breach is confirmed, Temu could face fines of up to 6% of its worldwide annual turnover and be ordered to take corrective actions to comply with the DSA. The company has the opportunity to respond in writing to the Commission’s preliminary findings.
Henna Virkkunen, European Commission Vice President, emphasized the importance of consumer safety online in the EU, stating that it is non-negotiable and that EU laws, including the Digital Services Act, are the foundation for better online protection. She stated that, in their preliminary view, Temu is "far from assessing risks for its users at the standards required by the Digital Services Act."
Prominent on the EU executive arm's long list of complaints is the claim that Temu is exporting products to the EU that do not comply with the bloc's standards. The Commission has also accused Temu of offering fake discounts, publishing fake reviews, and having insufficient vendor information on its platform. A Temu spokesperson confirmed that the company will continue to cooperate fully with the European Commission.
No final decision has been made regarding any potential DSA violation or fine for Temu. However, the preliminary findings indicate a high risk for consumers in the EU to encounter illegal products on the platform, underscoring the severity of the situation. The Commission's investigation into Temu's business model is ongoing.
- The breach of the Digital Services Act (DSA) by Temu, a Chinese online retail giant, is not limited to risk assessment, as the European Commission also accuses the company of exporting products to the EU that do not comply with the bloc's standards, offering fake discounts, publishing fake reviews, and having insufficient vendor information on its platform.
- The European Commission's investigation into Temu's business model extends beyond risk assessment, as it also scrutinizes the effectiveness of the company's mitigation measures against illegal content and products, the use of addictive or manipulative design features on its platform, the transparency and fairness of its recommendation systems, and its access to data for independent researchers to verify compliance.
- The violation of the Digital Services Act (DSA) by Temu is not just a matter of finance, but also a concern for general-news, politics, business, technology, and specifically Europe, as the Commission's investigation uncovers a potential threat to consumer safety, the EU's digital single market protections, and the integrity of the online marketplace, with nearly 94 million average monthly active users in the EU.
