EU takes action against Temu over concerns of illegal products

The European Union has initiated formal proceedings against the Chinese shopping platform Temu due to concerns that it is not adequately preventing the sale of illegal products online.

A formal investigation was launched on October 31 by the European Commission, which highlighted worries about the platform, a budget-friendly competitor to Amazon, Caliber.Az reports via UK media.

Temu, which promotes itself with the slogan “shop like a billionaire,” has quickly captured a significant share of the EU market since its launch in April of last year, attracting approximately 100 million users with its diverse offerings, including cosmetics, clothing, furniture, and tech, all sourced directly from China.

The European Commission has raised multiple concerns regarding the platform, which is operated by PDD Holdings, claiming it may be violating the new Digital Services Act (DSA) that governs various tech companies, including Facebook, X, and Google.

Key issues include the platform's insufficient measures to prevent the re-emergence of “previously suspended rogue traders,” with problematic products often reappearing within days of their removal.

A senior official from the commission indicated that there were significant concerns regarding the sale of counterfeit items, pharmaceuticals, cosmetics, and toys, particularly raised by authorities in Germany, Denmark, and Ireland, where Temu has established its EU headquarters.

“We have received substantial feedback from various authorities, and there is a strong suspicion that not enough is being done effectively to stop the spread of illegal products,” the official remarked.

They expressed concerns that Temu has not implemented “effective control systems” for reviewing, monitoring, and screening activities on its platform.

Additionally, the commission has expressed alarm over the platform's aggressive sales strategies, characterized by an “addictive design” that employs “game-like rewards,” coupled with inadequate systems to mitigate the associated risks.

If found to be in violation of the DSA, Temu could face significant fines.

Temu's growth trajectory has been notable, with user numbers increasing from 75 million in April to 92 million by September.

“It is important to emphasize that these are merely suspicions at this stage; they are not conclusions or even preliminary findings,” an official clarified.

They added that the investigation aims to determine whether a “systemic” issue exists.

By Tamilla Hasanova