The European Commission initiated a formal investigation against the Chinese online shopping platform Temu on Thursday, citing potential violations of the Digital Services Act (DSA). As Temu’s popularity has surged since its EU launch last year, concerns have mounted over the platform’s handling of illegal and counterfeit products, ranging from cosmetics to tech, for its 100 million users across the bloc.
The commission expressed specific concerns that Temu, owned by PDD Holdings, may lack effective systems to prevent banned or unsafe products from resurfacing. Senior officials noted the prevalence of complaints, particularly from Germany, Denmark, and Ireland, regarding counterfeit goods, unregulated pharmaceuticals, and toys reappearing online shortly after removal.
The commission is also scrutinizing Temu’s sales tactics, particularly its “addictive” interface design involving “game-like rewards,” and whether these practices breach consumer protection standards. Failure to comply with the DSA could result in substantial fines for the platform.
Margrethe Vestager, the European Commission’s Vice-President, emphasized the importance of compliance, stating, “We aim to ensure that Temu respects EU standards and does not harm consumers. Our enforcement will create a fairer market, ensuring all platforms meet safety and transparency standards.”
Background and Consumer Advocacy Concerns
The investigation follows a series of complaints from European consumer advocacy groups, which accused Temu of failing to provide clear seller information, allegedly violating the DSA. Pan-European and national consumer organizations from 17 EU countries, including France, Italy, and the Netherlands, also filed complaints against Temu, echoing concerns that unsafe products and deceptive sales tactics could harm consumers.
Temu’s Response and Cooperation
Temu asserted its commitment to DSA compliance, pledging to enhance consumer protection on its platform. The company is also set to sign a “memorandum of understanding on the sale of counterfeit goods on the internet,” a voluntary initiative aimed at combating counterfeit products in collaboration with EU regulators. A Temu spokesperson remarked, “Counterfeiting is an industry-wide challenge, and we believe that collaborative efforts are essential to advancing our shared goals of protecting consumers.”
