In a significant enforcement action under the Digital Services Act (DSA), the European Commission has imposed a €200 million fine on Chinese e-commerce giant Temu. The penalty stems from the company’s failure to adequately identify, analyze, and mitigate systemic risks associated with the sale of illegal and unsafe products on its platform, thereby endangering consumers within the European Union. (digital-strategy.ec.europa.eu)
Inadequate Risk Assessments and Consumer Safety Concerns
The Commission’s investigation revealed that Temu’s risk assessment for 2024 was insufficient, relying on general industry data rather than specific evidence pertaining to its own platform. This oversight led to a significant underestimation of the likelihood that EU consumers would encounter illegal products. Notably, a “mystery shopping” exercise uncovered that a high percentage of chargers sold through Temu failed basic safety tests, and many baby toys posed medium to high safety risks due to the presence of chemicals exceeding legal limits or detachable parts that could cause choking hazards. (digital-strategy.ec.europa.eu)
Platform Design and Amplification of Risks
The Commission also criticized Temu for not properly assessing how its platform design, including recommender systems and product promotion programs involving affiliated influencers, could amplify the dissemination of illegal products. Under the DSA, very large online platforms are obligated to diligently assess systemic risks linked to their services and implement corresponding mitigation measures. (digital-strategy.ec.europa.eu)
Temu’s Response and Required Actions
In response to the fine, Temu expressed disagreement with the European Commission’s decision, describing the penalty as “disproportionate.” The company emphasized its commitment to the objectives of the Digital Services Act and the necessity for clear, consistent rules in the digital economy. Temu stated that the decision pertains to its initial DSA assessment in 2024 and does not reflect the current state of its systems. The company has been collaborating constructively with the Commission throughout the process and has since taken further steps to enhance risk assessments, platform management, and user protection. Temu is currently reviewing the decision carefully and considering all available options. (digital-strategy.ec.europa.eu)
The European Commission has mandated that Temu submit an action plan by August 28, 2026, outlining measures to address the identified deficiencies in its risk assessment procedures. Failure to comply with this directive could result in additional penalties. The Commission has indicated that it will continue to engage with Temu to ensure adherence to the DSA and to safeguard consumer interests within the EU. (digital-strategy.ec.europa.eu)
This enforcement action underscores the European Union’s commitment to upholding consumer safety standards and holding online platforms accountable for the products they facilitate. It also highlights the critical importance of comprehensive and platform-specific risk assessments in the digital marketplace.
Highlights:
- Chinese online retailer Temu hit with $232 million fine over unsafe toys and electronics, Published on Thursday, May 28
- Bruselas multa a Temu con 200 millones de euros por no vigilar la venta de “productos ilegales en su plataforma digital”, Published on Thursday, May 28
- Bruselas impone una multa de 200 millones a Temu por la venta de productos ilegales en su plataforma, Published on Thursday, May 28