The European Commission has launched a formal investigation into the popular online shopping site Temu, with a view to examining possible breaches of the EU’s Digital Services Act. The move is part of the EU’s broader efforts to regulate digital services and online platforms operating within its jurisdiction.
The inquiry, officially opened on 31st October, was prompted by a series of preliminary risk assessments and responses provided by Temu to the European Commission (EC) earlier this year. Concerns were raised over illegal product sales, user-targeting methods, and issues related to data access for researchers.
In June and October, the EC issued formal requests for information, which, combined with the Chinese-owned online retailer’s own risk assessment submitted in September, revealed potential compliance conflicts. Additional information from third-party sources and EU national authorities, notably the Irish Digital Services Coordinator, further solidified the need for closer examination.
ENQUIRY LOOKING AT SEVERAL AREAS
The EC’s investigation is set to explore several key areas. First, it will assess the effectiveness of Temu’s safeguards against the sale of non-compliant products within the EU, including its ability to prevent previously banned sellers from reappearing. Ongoing issues with rogue traders returning to the platform suggest potential gaps in Temu’s monitoring and regulation systems.
Another focal point is the platform’s design, which some have termed addictive, notably due to game-like reward programmes that entice users to stay on the site. Such practices have raised concerns about possible risks to users’ physical and mental well-being.
The investigation will also examine Temu’s compliance with rules governing recommendation algorithms. Under the EU’s Digital Services Act (DSA), platforms must disclose the core principles guiding their recommendation systems and offer users at least one option that is not based on profiling.
Finally, the investigation will review the company’s adherence to DSA requirements for data access, specifically for researchers seeking information on public interactions with the platform.
THEN WHAT?
If the investigation finds that Temu has breached the DSA, it could face significant consequences, such as a non-compliance decision. In this case, Temu could be fined up to 6% of its global turnover and be ordered to take corrective actions.
While the EC has made no conclusions at this stage, it will continue to gather evidence, including further information from the company and relevant third parties.
Additionally, the DSA does not specify a timeline for investigations in this case; the complexity and level of cooperation from Temu will influence the duration. The EC’s inquiry will remain open-ended, allowing for additional actions in the future if necessary.
National authorities within the EU’s Consumer Protection Cooperation Network, along with market surveillance agencies, could also take enforcement actions based on the findings of this landmark investigation.
These actions highlight a cooperative effort among EU regulators to uphold digital safety and consumer protection standards, marking a new era of scrutiny for online marketplaces across the region.
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