EU Accuses Temu of Breaking Laws through Offering Illicit Goods
The European Commission has launched a formal investigation into Chinese online retail giant Temu, alleging that the company has violated the Digital Services Act (DSA) by failing to adequately prevent the sale of illegal products on its platform in the EU. This investigation follows concerns about Temu's practices that put consumers at a "high risk" of encountering unsafe or non-compliant goods, such as baby toys and small electronics, which do not meet EU safety or regulatory standards.
The Commission's preliminary findings indicate that Temu did not properly assess the risks of illegal products being disseminated on its marketplace, violating Article 34 of the DSA. The probe also focuses on several other potentially problematic practices, including how Temu's systems recommend content and products to users, possibly promoting unsafe or non-compliant items.
The Commission's investigation also raises concerns about Temu's data access policies for researchers, which may lack transparency or sufficient cooperation. Additionally, the use of addictive design features that could negatively affect users' physical and mental well-being is a broader consumer protection concern.
If the concerns about Temu's practices persist, the EU may declare a DSA violation and impose a fine of up to 6% of its global annual turnover. In response, Temu's spokesperson has stated that the company will continue to "cooperate fully" with the Commission.
The Digital Services Act in the EU sets strict standards for online platforms, including requirements for consumer protection. Vice President of the European Commission, Henna Virkkunen, has reiterated that consumers' safety online is non-negotiable in the EU. The DSA requires the world's largest tech firms, classified as "very large online platforms," like Temu, to do more to protect European consumers online.
Temu, with nearly 94 million average monthly active users in the European Union, is one of the largest online retail platforms operating in the region. The European Commission's investigation underscores the importance of compliance with EU regulations for all online retailers seeking to do business in the EU.
[1] European Commission Press Release, "European Commission Launches Formal Investigation into Chinese Online Retail Giant Temu," October 2024. [2] European Commission, "Digital Services Act," accessed November 2024. [3] European Commission, "Consumer Protection under the Digital Services Act," accessed November 2024. [4] European Commission, "Fines for Violations of the Digital Services Act," accessed November 2024.
- The investigation by the European Commission into Temu, a Chinese online retail giant, is not limited to violations of the Digital Services Act (DSA) but also involves concerns about its data access policies for researchers, potentially problematic content recommendation systems, and the use of addictive design features that could impact users' physical and mental well-being, all parts of the broader consumer protection concern.
- The European Commission's investigation of Temu highlights the significance of compliance with EU regulations for all online retailers aspiring to conduct business in the EU, as the world's largest tech firms, such as Temu, are subject to stringent requirements under the Digital Services Act (DSA) for consumer protection.
- The global technology industry and finance sectors are closely monitoring the ongoing investigation by the European Commission into Temu, as potential violations of the DSA could result in fines of up to 6% of the company's global annual turnover, a move that would have far-reaching implications for political and general-news discourse across the world.
