The EU science and technology regulator has recently indicated that Temu, an online retailer, was fined 200 million euros for failing to take sufficient measures to prevent the sale of illegal products. The investigation into Temu has been ongoing for two years, and further penalties may be introduced in the coming months, pursuant to the requirement that large online companies in the Digital Services Act (DSA) take additional measures to address illegal and harmful content on the platform.
This investigation originated from the complaints filed against Temu by the Pan-European Consumer Organization, BEUC, and its 17 member organizations. The European Commission stated that Temu had failed to exercise due diligence in identifying, analysing and assessing the systemic risks of illegal products sold on the platform and the resulting damage to EU consumers. The Committee criticized Temu for failing to properly assess how its referral system and the Internet-connected Red outreach programme might magnify the risk of illegal product sales.
In a statement, Temu stated: “Temu respects the requirements of the DSA and the need for clear and consistent rules in the entire digital economy. However, we disagree with the decision of the European Commission and consider the fine to be excessive.”
Temu adds: “The decision of the European Commission, based on our first DSA assessment in 2024, does not reflect the current state of our system. In the course of the survey, Temu had constructive communication with the European Commission and further steps had been taken to strengthen risk assessment, platform governance and user protection.” Temu also indicated that it would continue to communicate with regulators and was considering all possible responses.
The European Commission requested Temu to submit an action plan by 28 August, which will be evaluated by the regulator and a decision within two months on whether it has taken sufficient measures to comply with the DSA.
In an interview, the EU science manager Henna Vikkunen stated: “This is about risk management and is the cornerstone of our data security agreement. Through this decision, we sent a very strong signal to Temu.” She indicated that regulators would continue to investigate whether Temu ‘ s service design was addictive and to assess more broadly whether it was selling illicit products, as well as the data access rights of referral systems and researchers.
According to DSA, an enterprise may face a fine of up to 6 per cent of its global annual turnover. Temu was fined for the second time since DSA was imposed, after Elon Mask ‘ s social platform X was fined 120 million euros last December.
