European Commission Launches Investigation into Temu for Potential DSA Violations
The European Commission has initiated formal proceedings against the Chinese online platform Temu, examining its compliance with the EU’s Digital Services Act (DSA). Founded by PDD Holdings in 2022, Temu is currently under scrutiny for several issues, including the sale of illegal products and the design features of its service that may lead to addictive behaviors. These design elements include game-like reward systems that could negatively affect user well-being. Furthermore, the investigation will also focus on the recommendation systems utilized by the platform and its data accessibility for researchers.
This decision follows previous inquiries directed at Temu, where the Commission sought responses to questions regarding the measures the platform has implemented to combat the sale of illegal products. The ongoing investigation has been informed by insights from various third parties. Notably, the European Consumer Organisation (BEUC) lodged complaints with national regulators and the Commission in May, asserting that Temu has failed to adequately protect consumers while employing manipulative practices.
In the same month, the Commission classified Temu as a Very Large Online Platform (VLOP) under the DSA, given that it surpasses the threshold of 45 million average monthly users in the EU. Temu reported having 92 million monthly users as of September.
Fernando Hortal Foronda, Digital Policy Officer at BEUC, expressed cautious optimism regarding the Commission’s actions. In a statement, he noted, “Numerous issues have been identified by consumer groups concerning Temu, including the presence of dangerous or illegal products and the frequent use of design techniques that deceive consumers. This decision by the Commission is a promising development, but it is merely the beginning. It is crucial for the Commission to maintain pressure on Temu and ensure the company adheres to legal standards promptly.”
The Commission is committed to continuing its evidence-gathering efforts. Should it find sufficient proof of DSA violations, it may pursue further enforcement measures, including the issuance of a non-compliance ruling.
In response to the investigation, Temu released a statement asserting its commitment to fulfilling its obligations under the DSA. “We take our responsibilities seriously and will fully cooperate with regulators to achieve a safe and trusted marketplace for consumers,” the statement read. Additionally, the company confirmed its engagement in discussions to join the “Memorandum of Understanding (MoU) on the sale of counterfeit goods on the internet,” a voluntary agreement facilitated by the European Commission.
The DSA officially came into effect in August of the previous year for the largest online platforms and extended its applicability to all platforms in February. To date, the Commission has designated 25 platforms as VLOPs, which includes notable names such as Amazon, Shein, X, and AliExpress. The Commission also has ongoing non-compliance investigations involving several platforms, including Meta and TikTok.
