The European Union on Monday accused fast-rising e-commerce platform Temu of violating its flagship tech regulation, the Digital Services Act (DSA), citing serious concerns about user safety and the presence of illegal products on the platform.
In its preliminary findings, the European Commission said Temu had failed to conduct a proper risk assessment and implement effective measures to curb the sale of non-compliant and potentially dangerous goods, especially baby toys and small electronics, within the EU.
“Evidence showed that there is a high risk for consumers in the EU to encounter illegal products on the platform,” the Commission stated, referencing a mystery shopping exercise that exposed widespread availability of unsafe items.
Temu, founded in China and owned by PDD Holdings, entered the European market in 2023 and has rapidly gained traction, boasting an estimated 93.7 million average monthly active users across the EU’s 27 countries. However, the EU flagged the company’s October 2024 risk report as “inadequate,” noting that it leaned on generic industry data rather than a thorough internal review of its marketplace.
The probe is part of a broader crackdown under the DSA, a sweeping regulation enacted to hold tech giants accountable for illegal content, consumer protection failures, and harmful digital practices. If found guilty of breaching the DSA, Temu could face fines of up to 6% of its global annual revenue and be compelled to implement corrective measures.
Beyond product safety, the Commission is also investigating other possible DSA violations by Temu, including the use of addictive design elements and the lack of transparency in its algorithmic recommendation systems.
While Temu will have a chance to respond to the allegations, the EU has not yet announced when it expects to conclude the investigation.
