The European Union has taken formal action against Temu, prompting an investigation into potential illegal activities on the platform.
- Concerns have been raised that Temu is not preventing the sale of illegal goods effectively, violating the Digital Services Act (DSA).
- The European Commission highlights potentially manipulative practices and inadequate systems to block rogue traders.
- Temu’s “addictive design” sales tactics are under scrutiny for potential consumer risk.
- The investigation follows complaints from a pan-European consumer group about a lack of seller transparency.
The European Union has initiated a formal investigation against the major ecommerce platform, Temu, due to apprehensions that the company is not adequately preventing the sale of illegal goods. This move comes as part of the EU’s effort to ensure compliance with the new Digital Services Act (DSA), which regulates how companies must manage online content and services. The investigation signals a significant step in enforcing the DSA’s objectives to protect consumers within the European market.
Serious concerns have been raised regarding Temu’s inability to keep illicit products off its platform. The European Commission, in its investigation, points out that Temu might not have sufficient measures to stop previously banned traders from reappearing. This issue has been noted particularly because some products, previously removed, have resurfaced swiftly after being taken down.
The investigation also sheds light on how Temu employs aggressive sales tactics coupled with an addictive design. Methods such as ‘game-like rewards’ are used to engage consumers, potentially leading to consumer harm. The Commission stresses the importance of mitigating the risks arising from such practices to ensure a safe and fair marketplace for all users.
Margrethe Vestager, Executive Vice-President responsible for the EU’s digital portfolio, emphasised the necessity for Temu to adhere to the DSA. She highlighted that products sold should meet EU standards and prioritise consumer safety. Vestager’s statements reflect the EU’s commitment to maintaining a secure online marketplace, where all platforms adhere to the same rules.
A representative from Temu has stated that the current proceedings are based on suspicions and have not yet produced any conclusions. They underscored that the investigation aims to determine whether Temu faces a systemic issue with its current operational practices. This stance suggests Temu’s openness to cooperate with the investigation while defending its current protocols.
Complaints leading to this investigation were propelled by a pan-European consumer group citing breaches in DSA terms. The group argued that Temu failed to provide essential information about sellers on its platform, thus rendering consumers at risk. This complaint was joined by 17 other EU member states, signalling broad concern over the platform’s practices.
The ongoing EU investigation into Temu underscores the critical importance of regulatory compliance for digital platforms operating within Europe.
