Temu, the Chinese online retailer, has been accused by European Union regulators of failing to prevent the sale of products deemed “illegal” and “non-compliant” with EU standards on its platform.
The preliminary findings follow an investigation begun last year under the EU’s Digital Services Act (DSA), the bloc’s wide-ranging rulebook that requires online platforms to maintain and upgrade measures ensuring internet users’ safety or face possible fines of up to 6% of a company’s annual global revenue plus an order to fix the problems.
According to the European Commission consumers in the EU were at “high risk” of encountering “illegal products” on the Temu site. Having carried out a so-called “mystery shopping exercise”, investigators had found “non-compliant” products, baby toys and small electronics among them, on the Temu site.
While the Commission didn’t specify precisely why the products were deemed illegal, it noted that a surge in online sales within the bloc had been accompanied by a parallel jump in the number of unsafe or counterfeit goods being detected.
In opening the investigation, the EU regulators said they were checking whether Temu was doing enough to crack down on “rogue traders” selling “non-compliant goods” amid concerns that they seemed to reappear quickly soon after being suspended.
The Commission’s preliminary findings determined that Temu might have had “inadequate mitigation measures” in place due to the company’s reliance on “inaccurate” risk assessment practices based on general industry information rather than specifics about its own marketplace.
“We shop online because we trust that products sold in our Single Market are safe and comply with our rules,” Henna Virkkunen, the EU’s executive vice-president for tech sovereignty, security and democracy, said in a news release. “In our preliminary view, Temu is far from assessing risks for its users at the standards required by the Digital Services Act (DSA).
Temu is owned by Pinduoduo Inc., a popular e-commerce site in China, and has 92 million users in the EU. It offers cheap goods from clothing to home products, which are shipped from sellers in China.
A brief statement from the company noted it would “continue to cooperate fully with the Commission.” Before the EU reaches a final decision, Temu will have the chance to examine the investigation files and respond to the accusations.
