The European Union accused the Chinese-founded online shopping giant Temu on Monday, July 28th, of breaking the bloc’s digital rules by not “properly” assessing the risks of illegal products.
EU regulators believe Temu is not doing enough to protect European consumers from dangerous products and that it may not be acting sufficiently to mitigate risks to users.
“Evidence showed that there is a high risk for consumers in the EU to encounter illegal products on the platform,” the European Commission said in its preliminary finding.
It pointed to a mystery shopping exercise that found consumers were “very likely to find non-compliant products among the offer, such as baby toys and small electronics.”
Wildly popular in the European Union despite only having entered the continent’s market in 2023, Temu has 93.7 million average monthly active users in the 27-country bloc.
Temu is under investigation as part of a mammoth law known as the Digital Services Act (DSA) that forces the world’s largest tech firms to do more to protect European consumers online and better police content online.
Temu will now be able to respond to the EU regulators’ findings and defend itself, but there is no time limit on how long an investigation may last.
If confirmed to be in breach, the EU can slap a fine on Temu.
Fines under the DSA can go as high as six percent of a company’s total worldwide annual turnover and force it to make changes to address violations.
