Temu is not doing enough to assess the risks of illegal products being sold online and could be in breach of a new digital services law, the European Commission said.
The commission said on Monday that there was a “high risk” of consumers in the EU encountering illegal products on the e-commerce giant’s platform.
Specifically, analysis of a mystery shopping exercise conducted by the commission found that consumers shopping on Temu were very likely to find non-compliant products, including baby toys and small electronics.
The statement is part of an investigation into the e-commerce giant under the commission’s Digital Services Act (DSA), a new piece of legislation governing online content in the European Union.
It forces companies that run online platforms such as e-commerce websites to assess how likely consumers are to be exposed to dangerous or illegal products, and work to lessen the risk.
The commission said according to its analysis, a risk assessment carried out by Temu, which is owned by PDD Holdings, in October 2024 was “inaccurate” and “relying on general industry information rather than on specific details about its own marketplace”.
Henna Virkkunen, executive vice-president for ‘tech sovereignty, security and democracy’, said: “We shop online because we trust that products sold in our Single Market are safe and comply with our rules.
“In our preliminary view, Temu is far from assessing risks for its users at the standards required by the Digital Services Act.
“Consumers’ safety online is not negotiable in the EU – our laws, including the Digital Services Act, are the foundation for a better protection online and a safer and fairer digital Single Market for all Europeans.”
The company could face a fine of up to 6% of its annual worldwide turnover if the commission ultimately decides its risk assessment does not meet the companies’ obligations under the DSA.
The commission said officials would also continue investigating the company over other suspected breaches of the DSA such as using addictive design features and a lack of transparency on its algorithms.
The EU is trying to counter what it sees as a glut of cheap and potentially unsafe products from China flooding the single market.
Officials also sent a formal warning to Shein in May, saying the company’s sales tactics fell foul of EU consumer protection law.
