EU Investigates Temu for illegal Product Sales, Could Face 6% Annual Revenue Fines
1min read The European Union is set to investigate Temu over concerns that it has failed to control the sale of illegal products online, an inquiry that could result in significant fines for the e-commerce platform.
The European Commission suspects that Temu may be violating the Digital Services Act (DSA), a law aimed at reducing illegal content and disinformation online. If Temu is found to be in breach, it could face fines of up to 6% of its annual revenue.
Under the DSA, online platforms with over 45 million users in the EU are required to curb the spread of disinformation and illegal content, including prohibiting the sale of items banned within the EU, or risk facing penalties of up to 6% of their global revenue.
The Commission will also examine Temu's transparency, data access policies, and the potential use of addictive features to keep users engaged. It raised concerns that illegal or hazardous products might be available on the platform and that Temu may not be doing enough to monitor untrustworthy sellers.
A Temu spokesperson stated that the company will fully cooperate with regulators and "takes its obligations under the DSA seriously, continuously investing in strengthening compliance and protecting consumer interests." Temu also noted it is in discussions to join a voluntary EU-led agreement to combat the sale of counterfeit goods online.
This investigation follows the EU's request on October 11 for Temu to provide data on how it addresses counterfeit and unsafe products on its marketplace. At that time, the Commission demanded "detailed information and internal documents on measures to prevent and address the presence of sellers of illegal products" on Temu.
