The European Commission has launched an investigation into the Chinese e-commerce platform Temu for selling illegal products a week after the initiation. The European Consumer Protection Cooperation Network has demanded that Temu correct its illegal sales practices or face fines.
The Consumer Protection Cooperation Network (CPC) of Europe issued a request to the Chinese e-commerce platform Temu on November 8th to rectify its illegal business activities. They also warned that if timely measures are not taken, the platform will be fined.
The CPC network is a cooperation organization composed of consumer protection departments from 27 EU member states, as well as Norway and Iceland. The European Commission will promote and coordinate joint investigations and enforcement actions.
A week prior on October 31st, the European Commission initiated an investigation into whether Temu violated the Digital Services Act (DSA) by selling illegal products.
CPC highlighted that Temu’s business practices violate consumer protection regulations of various countries. The violations include:
– False discounts: Creating the impression of discounted products when in reality there are none.
– Pressure sales: Using false limited supply or purchase deadlines to pressure consumers into making purchases.
– Forced gamification: Upon opening the app, a wheel with amounts starts spinning, inducing consumers to make purchases by claiming to win discount vouchers.
– Missing and misleading information: Incomplete and inaccurate information regarding consumers’ rights to returns and refunds.
– Fake reviews: Temu failed to provide sufficient information to ensure the authenticity of reviews posted on its website.
– Hidden contact methods: Consumers cannot easily contact Temu with questions or complaints.
Temu has one month to respond to the findings of the CPC investigation and commit to addressing the identified issues.
So far, relevant institutions in Hungary, Poland, and France have announced national actions against Temu’s commercial violations.
Established in 2022, Temu’s cheap dumping strategy and product quality issues have sparked international controversy. Apart from the EU and its member states, the US, South Korea, and Thailand have also announced investigations into Temu.
Most recently, the Vietnamese government stated that if e-commerce platforms Shein and Temu do not register their business with the Vietnamese Ministry of Industry and Trade by the end of November, they will be banned in Vietnam.
On May 31, 2024, under the Digital Services Act (DSA), Temu was designated as a Very Large Online Platform (VLOP) by the EU.