European Union launches investigation against Chinese platform Temu

(Patria) - The European Union has launched a formal investigation against the Chinese shopping platform Temu, on suspicion that it does not prevent the sale of illegal products online.

The platform, which has positioned itself as a cheaper alternative to Amazon, has recorded rapid growth in the EU market. The Commission has expressed concern that Temu, owned by PDD Holdings, violates the Digital Services Act (DSA) due to insufficiently effective systems for preventing the return of suspended traders.

Complaints have been filed regarding the failure to provide information about sellers and the use of manipulative design techniques.

In June, the Commission sent formal requests for information to Temu and its rival Shein, in order to determine whether they comply with obligations related to child protection and transparency of product sources. Consumer groups across Europe, including BEUC, have supported the investigation, highlighting problems with dangerous and illegal products.

Margrethe Vestager, Executive Vice-President of the European Commission, stated that the aim of the investigation is to ensure that Temu complies with the DSA and EU standards, and the company could face large fines if violations are confirmed.

Temu responded that it takes its obligations under the DSA seriously, investing in improving compliance and consumer protection systems. The platform announced the signing of a memorandum of understanding on the sale of counterfeit goods online, as part of efforts to combat counterfeiting.

The European Commission is also concerned about aggressive sales tactics and a design with "game-like rewards" that may have addictive effects.