EU Accuses Temu of Violating Digital Services Act Over Illegal Products

The European Commission has found that Chinese e-commerce platform Temu may be violating the Digital Services Act by allowing the sale of illegal products and failing to meet EU safety standards. Temu is also accused of fake discounts, reviews, and having an addictive app design. If confirmed, the company could face fines up to 6% of its global revenue. Temu says it will fully cooperate.

The European Commission has determined that the Chinese online shopping platform Temu is not taking sufficient measures to prevent the sale of illegal products on its site.

According to the Commission's preliminary findings, the Chinese online retail giant has been found to be in violation of the regulations outlined in the Digital Services Act (DSA).

Evidence showed that there is a high risk for consumers in the EU to encounter illegal products on the platform, the Commission said in a press release issued on Monday.

Temu has been categorized as a "very large online platform" under the DSA, which places additional responsibilities on the world’s largest tech companies to better protect consumers within the European Union. The platform reportedly has nearly 94 million average monthly active users in the EU.

This development follows the formal investigation the European Commission launched into Temu's business model in October.

A major concern in the EU executive arm’s extensive list of allegations is that Temu is exporting products to the EU that do not meet the bloc’s regulatory standards.

“We shop online because we trust that products sold in our Single Market are safe and comply with our rules. In our preliminary view, Temu is far from assessing risks for its users at the standards required by the Digital Services Act,” said European Commission Vice President Henna Virkkunen.

The Commission also accused the online retailer of engaging in practices such as offering fake discounts, publishing fabricated reviews, providing insufficient vendor information, and designing an app interface that encourages addictive behavior.

Temu will have an opportunity to respond to the allegations. However, if the concerns are not adequately addressed, the EU may formally declare a violation of the DSA and impose a fine of up to 6% of the company’s global annual revenue. No final decision has been made at this stage.

A spokesperson for Temu stated that the company intends to continue cooperating fully with the Commission.

“Consumers’ safety online is not negotiable in the EU — our laws, including the Digital Services Act, are the foundation for better protection online,” Virkkunen added.