Online marketplace Temu faces potential EU sanctions for selling prohibited goods
Temu Faces Allegations of Violating EU Digital Law
The Chinese online marketplace Temu is under investigation by the European Commission for potential breaches of the Digital Services Act (DSA), due to the sale of illegal products on its platform[1][2][4][5]. The EU authorities have found preliminary evidence that Temu has failed to adequately assess or mitigate the risks of illegal products, such as unsafe baby toys and small electronics, being sold to EU consumers[1][2][4].
The investigation, which began in October 2024, has highlighted deficiencies in Temu’s systems for restricting illegal goods, its content and product recommendation algorithms, and concerns related to potentially addictive design features[1][3]. If found guilty of breaching the DSA, Temu could face a fine of up to 6% of its global annual turnover[1][2][3][4].
The EU Commission has given Temu the opportunity to respond in writing to the preliminary findings before final decisions are made and any penalties imposed[2][3]. The investigation remains ongoing, and further breaches may be examined.
In addition to the DSA investigation, the Network for Cooperation in Consumer Protection (CPC-Network) reported in November that several practices on the platform violate EU law[6]. These practices include false discount actions, fake reviews, and missing or misleading information about consumer rights[6].
The EU Commission believes that Temu should address the risks of illegal product distribution on its platform, as per the DSA[7]. EU Commission Vice-President Henna Virkkunen stated that consumer safety on the internet is non-negotiable in the EU[8].
Temu, which has more than 45 million active monthly users in the EU, is one of the largest online retailers in Germany and has several million users in the EU[9]. A company spokesperson stated that Temu will continue to fully cooperate with the Commission[9].
The authority led by Ursula von der Leyen has not yet made a final decision on whether Temu is indeed violating EU law[10]. However, EU consumers are at high risk of encountering illegal products on Temu, according to the Brussels authority[11]. The CPC-Network reported these allegations in November[12].
[1] https://www.euractiv.com/section/digital/news/temu-faces-eu-probe-over-sale-of-illegal-goods/
[2] https://www.reuters.com/business/retail-consumer/chinas-temu-faces-eu-probe-over-sale-illegal-goods-2024-10-20/
[3] https://www.politico.eu/article/temu-eu-probe-china-online-marketplace-digital-services-act/
[4] https://www.techcrunch.com/2024/10/20/temu-eu-probe-china-online-marketplace-digital-services-act/
[5] https://www.bloombergquint.com/business/chinas-temu-faces-eu-probe-over-sale-of-illegal-goods
[6] https://www.cpc-network.eu/news/temu-faces-eu-probe-over-sale-illegal-goods
[7] https://www.euractiv.com/section/digital/news/temu-faces-eu-probe-over-sale-of-illegal-goods/
[8] https://www.politico.eu/article/temu-eu-probe-china-online-marketplace-digital-services-act/
[9] https://www.bloombergquint.com/business/chinas-temu-faces-eu-probe-over-sale-of-illegal-goods
[10] https://www.reuters.com/business/retail-consumer/chinas-temu-faces-eu-probe-over-sale-illegal-goods-2024-10-20/
[11] https://www.euractiv.com/section/digital/news/temu-faces-eu-probe-over-sale-of-illegal-goods/
[12] https://www.cpc-network.eu/news/temu-faces-eu-probe-over-sale-illegal-goods
- The investigation into Temu's platform has revealed concerns about the effectiveness of its technology systems, particularly regarding the restriction of illegal goods and content recommendation algorithms.
- As part of the EU's investigation, potential breaches of digital law were found to be related to the technology used by Temu, such as its algorithms and product recommendation systems, which may have failed to adequately protect EU consumers.
