EU Targets Temu for Alleged Sale of Illegal Products, Risks 6% Global Turnover Fine
The European Commission has issued a preliminary finding against Chinese e-commerce giant Temu, accusing it of violating the Digital Services Act (DSA) by allowing the sale of illegal and unsafe products across its platform.
The Commission claims that Temu failed to conduct a proper risk assessment and neglected to implement effective measures to curb the sale of non-compliant products, particularly targeting baby toys and electronic devices that allegedly fall short of EU safety standards.
EU’s Investigation into Temu and the Digital Services Act
The investigation, launched in October 2024, aims to ensure that digital marketplaces are held accountable for consumer safety and regulatory compliance. Under Article 34 of the DSA, online platforms must proactively prevent the listing and sale of counterfeit or hazardous goods.
The Commission said Temu’s 2024 risk assessment was based on generic industry data rather than platform-specific risks. As a result, it described the assessment as “inaccurate” and claimed it likely failed to support adequate consumer protection measures.
“This may therefore have led to inadequate mitigation measures against the dissemination of illegal products,” the Commission noted.
Potential Consequences for Temu
If the Commission’s preliminary findings are confirmed, Temu could face a fine of up to 6% of its global annual revenue. Additional penalties may include:
- A non-compliance decision under the DSA
- To implement corrective actions
- A potential enhanced supervision period to ensure future compliance
The European Board for Digital Services will also weigh in before a final ruling is made.
Temu Responds to EU Accusations
In response to the EU’s claims, Temu issued a brief statement, saying:
“We will continue to cooperate fully with the Commission.”
This marks the company’s first public comment since the Commission revealed its concerns.
Background and Broader Implications
The proceedings against Temu began on October 31, 2024, in collaboration with:
- National Digital Services Coordinators
- Customs authorities
- Market surveillance agencies
- The Consumer Protection Cooperation (CPC) Network
The probe is part of the EU’s broader strategy to ensure that online marketplaces are not used to distribute dangerous or counterfeit goods.
The Commission has also conducted a product safety sweep as part of this coordinated effort, underscoring the EU’s commitment to consumer rights, digital safety, and marketplace transparency.
Why This Matters: Consumer Protection in the Digital Era
With more European consumers shifting to online platforms for their shopping needs, regulators are intensifying enforcement of the Digital Services Act, which took effect in 2023.
The DSA aims to:
- Protect consumer health and safety
- Enforce transparent risk assessments
- Prevent digital platforms from becoming safe havens for illegal goods
Temu’s case could serve as a landmark precedent in the enforcement of the DSA against non-EU tech giants operating within the Digital Single Market.
