Temu is the latest platform to have the European Commission (EC) set its regulatory sights. Europe’s highest consumer watchdog he said On Thursday, it is launching a formal investigation into online retailers to curb the re-emergence of previously banned “rogue traders with a history of stealing banned goods” who allow illegal products to be sold.
In addition to the illegal product claim, the EC is also investigating Temu’s potentially addictive design, the platform’s product recommendation systems and access to data for researchers. Under the alleged violations Digital Services Act (DSA)which empowers the EC to impose fines of up to six percent of Temu’s annual income.
In a statement to Engadget, a company spokesperson said it plans to cooperate fully. “Temu takes its obligations under the DSA seriously, continuously investing to strengthen our compliance system and protect consumer interests on our platform,” a Temu spokesperson wrote. “We will cooperate fully with regulators to support our shared goal of a safe, secure marketplace for consumers.”
Temu added that it is under discussion to join the “Memorandum of Understanding on the Sale of Counterfeit Goods on the Internet (MoU)”, a collective of online retailers (supported by the EC) working together to prevent the sale of counterfeit goods in Europe. “We can confirm that we are in discussions to join the initiative,” a Temu spokesperson told Engadget. “Counterfeiting is an industry-wide problem, and we believe that joint efforts are essential to advance our shared goals of protecting consumers and rights holders.”
The EC’s formal proceedings follow Temu’s initial risk assessment report to the EU at the end of September, his responses to the Commission’s official inquiries in June and October, and information shared by third parties. as Bloomberg notes, Meta, XAliExpress and TikTok also face DSA investigations.
The US, which usually lags far behind the EU in managing Big Tech, said in September it might also investigate Temu. The heads of the Consumer Product Safety Commission (CPSC). ordered staff to evaluate concerns about “deadly baby and baby products” on the platform.
Among the EC’s concerns is whether Temu’s systems are designed to prevent previously suspended traders and non-compliant products from reappearing. It will also look at the platform’s potentially addictive gamified rewards programs and systems to mitigate the risks from addictive design choices that can harm customers’ mental well-being. It will examine the parameters Temu uses to recommend products (the Commission wants at least one “non-profiling, readily available option”) and whether the company complies with the DSA’s requirement to provide publicly available data to researchers.
The EC does not set a statutory time limit for completing DSA investigations. Once concluded, the Commission will decide whether to drop the hammer, accept voluntary commitments to address the issues, or abandon the case.
