EU takes aim at Temu for doing little to keep illegal products off virtual shelves

The European Commission has opened a formal investigation into Chinese e-commerce platform Temu, citing concerns over illegal products and potentially harmful business practices.

The probe, announced yesterday, piles on regulatory scrutiny of the rapidly growing online marketplace.

European Competition Commissioner Margrethe Vestager emphasized the investigation’s focus on consumer protection, stating that Temu must demonstrate compliance with EU standards under the Digital Services Act (DSA). 

The platform, which was classified as a “very large online platform” in May, has attracted 92 million monthly active users across the EU through aggressive marketing and ultra-low pricing strategies.

Key concerns include Temu’s handling of counterfeit goods and what regulators describe as a platform with “potentially addictive design” features. The Commission is particularly interested in examining the platform’s systems for preventing “rogue traders” from selling non-compliant products and its measures to stop banned sellers from returning under new identities.

The investigation will also scrutinize Temu’s marketing tactics, including its game-like reward programs and other features that regulators fear may encourage excessive shopping behavior. If found in violation of the DSA, Temu could face penalties of up to 6% of its global turnover.

In response to the investigation, Temu has pledged full cooperation with regulators. 

The platform is also considering joining the European “Memorandum of Understanding on the sale of counterfeit goods online,” a voluntary agreement that includes major retailers like Amazon and Alibaba, as well as luxury brands such as Hermès and Moncler.

This investigation represents the latest challenge for Temu, which has rapidly expanded its European presence through its “shop like a billionaire” campaign and aggressive price competition.

Elsewhere, the platform is facing scrutiny in Vietnam after it was accused of operating in the country without regulatory approval. In early October, Indonesia banned Temu over concerns that it could squeeze out small businesses by flooding the market with cheap goods.

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