EU accuses Temu of violating Digital Services Act, warns of possible fines and stricter oversight.
Commission says platform failed to assess risks, allowed unsafe products to reach EU consumers.
The European Commission has accused Chinese e-commerce giant Temu of violating the Digital Services Act (DSA), raising the possibility of heavy penalties, including a fine of up to 6% of its global annual revenue.
In a preliminary finding released on Monday, the Commission stated that Temu had failed to properly assess and mitigate the risks associated with the sale of illegal and non-compliant products on its platform. The report identified a high likelihood that consumers in the European Union may encounter unsafe goods, particularly baby toys and small electronics that fail to meet EU safety standards.
Temu, known for its aggressive pricing and free shipping model, has rapidly gained popularity among online shoppers worldwide. However, the Commission found that the platform’s October 2024 risk assessment was flawed. Rather than relying on platform-specific data, Temu allegedly based its analysis on broad industry trends, missing the unique safety challenges within its marketplace.
“This may therefore have led to inadequate mitigation measures against the dissemination of illegal products,” the Commission said in its statement.
The Digital Services Act, which came into effect in 2023, imposes stringent obligations on digital platforms operating within the EU. It requires marketplaces to proactively monitor and prevent the sale of counterfeit and dangerous items. Failure to comply can result in severe penalties, including financial sanctions and increased regulatory oversight.
While the Commission’s findings remain preliminary, regulators have issued a warning: If Temu is ultimately found in breach of Article 34 of the DSA, it could face a non-compliance decision that includes both fines and enforced corrective measures. Such a decision could also place Temu under enhanced supervision to monitor its future compliance.
Temu has been granted the opportunity to respond in writing and review the investigation file. The European Board for Digital Services will also be consulted before any final decision is made.
