The European Commission has announced preliminary findings that Temu, a major online marketplace, is in breach of the Digital Services Act (DSA) due to its failure to adequately assess and mitigate the risks of illegal products being sold on its platform.
Following an in-depth investigation initiated on 31 October 2024, the Commission’s analysis revealed a high likelihood that consumers in the European Union encounter non-compliant and potentially unsafe products while shopping on Temu. Evidence gathered through a mystery shopping exercise highlighted the presence of illegal items, including baby toys and small electronics, that do not meet EU safety standards.
The Commission criticised Temu’s October 2024 risk assessment for relying on generic industry data rather than detailed marketplace-specific information. This approach allegedly resulted in insufficient measures to prevent the dissemination of illegal products, thereby putting consumer safety at risk.
Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, underscored the importance of consumer protection in the EU digital market, stating:
“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. Consumers’ safety online is not negotiable in the EU – our laws, including the Digital Services Act, are the foundation for better protection online and a safer and fairer digital Single Market for all Europeans.”
The Commission’s ongoing investigation also encompasses other concerns related to Temu’s compliance, such as the effectiveness of its mitigation strategies, the potential use of addictive design features, transparency of recommendation algorithms, and the platform’s data accessibility for researchers.
Temu now has the opportunity to respond to the preliminary findings and examine the Commission’s investigation file. Concurrently, the European Board for Digital Services will be consulted as part of the process.
If these preliminary conclusions are confirmed in the final decision, the Commission may impose fines of up to 6% of Temu’s global annual turnover and require remedial actions to address the breaches. Additionally, an enhanced supervision period could be initiated to ensure full compliance with the Digital Services Act.
This investigation forms part of the EU’s broader efforts to combat the growing proliferation of unsafe, counterfeit, and non-compliant goods in the digital marketplace. The Digital Services Act sets forth stringent obligations for online platforms to monitor and counter illegal content, ensure trader traceability, ban manipulative dark patterns, and provide transparent advertising and recommendation practices.
The Commission’s actions against Temu are coordinated with national Digital Services Coordinators, customs and market surveillance authorities, and other key stakeholders, reflecting a comprehensive and multi-agency approach to enforcing consumer safety and fair competition within the Digital Single Market.
