The European Union on Monday accused Chinese-founded online shopping platform Temu, of breaching the bloc’s Digital Services Act (DSA).
Temu, an e-commerce giant was accused of failing to properly assess and mitigate the risks of illegal and potentially dangerous products sold on its platform.
In a preliminary finding, the European Commission said Temu had not done enough to protect European consumers, citing evidence that users face a high risk of encountering non-compliant or unsafe items, including baby toys and small electronics.
“Evidence showed that there is a high risk for consumers in the EU to encounter illegal products on the platform,” the Commission referenced a mystery shopping exercise that revealed widespread availability of non-compliant goods.
Temu, which only entered the European market in 2023, has quickly gained popularity with an estimated 93.7 million average monthly active users across the EU’s 27 member states.
Despite its rapid growth, regulators found that Temu’s October 2024 risk assessment lacked accuracy, relying on vague industry data rather than a detailed analysis of its marketplace.
The investigation was part of broader enforcement efforts under the DSA. This landmark law compels large tech platforms to take more decisive action against illegal content and ensure user safety across digital services.
Temu will be able to respond to the Commission’s findings and present its defence, though EU authorities have not set a deadline for concluding the probe.
If the company is found in violation, it could face fines of up to 6% of its global annual revenue and be forced to implement corrective measures.
The EU’s probe also extended to other suspected breaches, including the alleged use of addictive design features that may negatively affect users’ physical and mental health, and the opacity of Temu’s content and product recommendation algorithms.
The DSA forms part of the EU’s growing arsenal to regulate Big Tech and rein in harmful practices online.
However, the law has drawn criticism from some quarters, particularly in the United States.
Last week, the Republican-led Judiciary Committee of the U.S. House of Representatives, in a sharply critical report, described the DSA as a “foreign censorship threat.”
Committee chair and President Donald Trump’s ally Jim Jordan is scheduled to meet with EU tech regulation chief Henna Virkkunen in Brussels on Monday.
Like Temu, the EU is currently conducting parallel DSA investigations into other major platforms and retailers, including AliExpress, Facebook, Instagram, TikTok, and X (formerly Twitter).
