Chinese online retailer Temu has come under scrutiny by European Union regulators. The company was accused of failing to prevent the sale of illegal products on its platform.
Last year, an investigation was launched under the EU’s Digital Services Act, a comprehensive set of regulations that requires online platforms to enhance user safety, with the risk of serious fines for non-compliance.
According to the European Commission, the executive body of the 27-member EU, an investigation revealed “a high risk for consumers in the EU to encounter illegal products.”
Investigators conducted a “mystery shopping exercise” that uncovered “non-compliant” items being sold on Temu, such as baby toys and small electronic devices.
While the commission did not detail the specific reasons the products were deemed illegal, it highlighted that the increase in online sales within the bloc has been accompanied by a corresponding rise in unsafe or counterfeit items.
EU regulators said at the start of the investigation that they would examine whether Temu is taking sufficient measures to curb “rogue traders” selling “non-compliant goods,” amid worries that such sellers can quickly return after being suspended.
The initial findings indicate that Temu may have implemented “inadequate mitigation measures” due to relying on an “inaccurate” risk assessment based on general industry data instead of detailed information from its own marketplace.
“We shop online because we trust that products sold in our Single Market are safe and comply with our rules,” the EU’s executive vice-president for tech sovereignty, security, and democracy, Henna Virkkunen, said.
“In our preliminary view, Temu is far from assessing risks for its users at the standards required by the Digital Services Act.”
In a short statement, Temu said it “will continue to cooperate fully with the Commission.”
Temu, owned by Pinduoduo Inc., provides a wide range of inexpensive products, including clothing and home goods. The e-commerce platform serves 92 million users within the EU.