On Monday, the European Commission stated that the Chinese e-commerce platform Temu has failed to effectively prevent the sale of illegal goods on its platform, violating EU regulations. The EU warned that if the preliminary investigation results are confirmed, Temu could face fines of up to 6% of its global annual revenue.
Evidence shows that European consumers face a high risk of encountering illegal goods on the Temu platform. Investigators conducted a “mystery shopping” test and found that consumers shopping on Temu are likely to come across non-compliant products such as baby toys and small electronic items.
Temu sells cheap products from Chinese sellers ranging from clothing to household items and currently has 92 million users in the EU. The e-commerce platform is owned by the well-known Chinese e-commerce company Pinduoduo Inc.
On October 31 last year, the EU launched an investigation into the platform for inadequate measures to stop the sale of illegal goods. The EU stated on Monday that the investigation results indicate that Temu’s risk assessment is insufficient, relying only on general industry information without conducting a specific analysis of its own platform situation.
The EU emphasized that if the above preliminary findings are confirmed, Temu will be found to have violated the Digital Services Act. This kind of decision could result in fines of up to 6% of its global annual revenue and be ordered to take remedial measures.
Henna Virkkunen, Vice President responsible for technical sovereignty, security, and democratic affairs at the European Commission, stated in a press release, “We shop online because we believe that goods sold in a single market are safe and compliant with regulations. According to our preliminary assessment, Temu falls far short of the standards required by the Digital Services Act in terms of risk assessment.”
A spokesperson for the EU said Temu can respond to the investigation results in the coming weeks. A spokesperson for Temu responded that the company will continue to “fully cooperate” with the European Commission’s investigation.
The EU further explained that this discovery is just one aspect of a broad investigation into Temu. Temu is also suspected of violating EU regulations regarding “addictive design features,” the transparency of recommendation systems, and opening data to researchers.
(Translated and adapted with reference to reports from Reuters and AP)