Brussels Launches Inquiry into Temu Over Illegal Products

The European Commission has launched an investigation into Chinese retailer Temu, probing its handling of illegal and hazardous products. Competition Commissioner Margrethe Vestager emphasized the importance of consumer safety and compliance with EU standards. Temu could face fines up to 6% of its annual sales if found guilty. The inquiry follows consumer associations’ complaints about misleading practices on the platform. The Commission will also assess Temu’s product recommendation systems and its cooperation with researchers.

On Thursday, the European Commission initiated an inquiry into the Chinese online marketplace Temu, which is under scrutiny for its alleged lack of action against the sale of illegal and potentially hazardous items.

“We aim to ensure that the products available on Temu’s platform adhere to EU standards and do not pose a risk to consumers,” stated Margrethe Vestager, the Competition Commissioner, in an official statement.

There is no specific timeline for the investigation’s conclusion. Should Temu be found in violation of regulations, it faces potential fines of up to 6% of its annual revenue under the new European Digital Services Regulation (DSA).

Temu has gained rapid popularity in Europe by implementing aggressive pricing strategies. It serves as the global counterpart to the Chinese e-commerce giant Pinduoduo, founded in 2015, and offers a wide variety of items ranging from clothing to home décor, tools, and electronic gadgets.

The company has expressed its commitment to collaborating with the European Commission.

“A spokesperson remarked, ‘Temu takes its responsibilities under the Digital Services Regulation very seriously and continuously invests in safeguarding consumer interests. We are dedicated to fully cooperating with regulators.’”

– ‘Maintaining the Pressure’ –

The investigation follows several warnings and inquiries directed at the platform.

Consumer advocacy groups welcomed the news on Thursday, with Fernando Hortal Foronda from the European Consumers’ Organisation (Beuc) stating, “This is a positive initial move, but it’s only the beginning. It’s crucial for the Commission to maintain pressure on Temu to ensure compliance with the law as quickly as possible.”

This inquiry will specifically examine the measures implemented to limit the sale of non-compliant products within the EU, particularly focusing on actions taken to prevent the re-emergence of illegal or counterfeit items, such as hazardous toys, chemicals, or medicines, as detailed by the European Commission.

Additionally, the Brussels-based executive, acting as the EU’s digital watchdog, will assess the potential risks associated with the addictive nature of online shopping services, particularly reward systems that might adversely impact users’ physical and mental well-being.

The Commission will also scrutinize product recommendation algorithms employed on the platform and the company’s responsibility to disclose the key parameters influencing these systems.

There are concerns that Temu may not have fulfilled its obligation to allow researchers access to data on its platform.

In May, European consumer groups lodged a complaint against Temu, alleging that it utilized deceptive interfaces to encourage users to spend more on the site.

On October 11, the company asserted that it had already implemented “significant changes” since spring while reiterating its commitment to refining its practices in line with the Digital Services Regulation.

At the end of September, six EU countries, including France and Germany, urged the Commission to take stronger measures against Temu.

“Every day, hundreds of thousands of parcels arrive in Germany, primarily from China, containing goods that violate European market regulations,” German State Secretary for Economic Affairs Sven Giegold stated during a meeting with EU colleagues in Brussels.

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