🔍 EU Targets Temu for DSA Compliance
The European Union has opened a formal investigation into Temu, the budget-friendly e-commerce platform from China. Concerns include the sale of illegal or non-compliant items like toys and cosmetics, addictive design features, and inadequate data transparency. Officials are acting under the recently enacted Digital Services Act (DSA), aiming to protect European consumers from risks. Temu could face fines up to 6% of its global revenue, as its parent company Pinduoduo navigates these growing regulatory challenges.
🛍️ Focus on Illegal Products and “Addictive” Design
EU officials have received reports of illegal products repeatedly reappearing on Temu’s platform. Concerns extend to Temu’s gamified design, which may affect users' mental well-being. Regulators argue Temu’s systems encourage compulsive shopping via features like infinite scrolling. The DSA mandates safeguards against such practices, pushing platforms to ensure user safety and comply with stricter standards as of October 2024. This heightened scrutiny follows complaints filed by consumer groups and concerns from countries like Ireland and Germany.
📊 Researcher Access and Transparency Issues
Another key focus is transparency: Temu faces criticism for failing to provide public data access, essential for researchers. The DSA requires platforms to share details, including non-compliant product rates, to promote accountability. Despite Temu’s promises to cooperate, officials note that their risk assessment document, submitted in September, lacked depth. This transparency gap could lead to closer regulatory monitoring if Temu does not improve its reporting and risk mitigation strategies soon.
🧩 Industry Reactions and Next Steps
Temu claims it is committed to compliance and is discussing joining the EU's Memorandum on anti-counterfeiting efforts. Fernando Hortal Foronda from the European Consumer Organisation highlighted recurring consumer concerns and urged the EU to keep pressing for compliance. While this investigation may end if Temu offers binding commitments, officials emphasize that enforcement remains a priority. Temu follows AliExpress in facing these high standards as the EU continues tackling online marketplace safety.
Is the EU’s scrutiny of Temu justified or too harsh?
