EU Preliminarily Finds Temu Violated Digital Services Act Over Illicit Products
The European Commission has issued a preliminary finding that Temu, the Chinese e-commerce platform operated by PDD Holdings, violated the EU’s Digital Services Act (DSA). The violation stems from Temu's failure to adequately assess and mitigate risks associated with illegal products on its site. A mystery shopper investigation revealed that consumers in the EU are likely to encounter unsafe items, including non-compliant baby toys and electronics. Furthermore, the Commission deemed Temu’s October 2024 risk report inadequate because it relied on generic industry data rather than addressing platform-specific risks. If these findings are confirmed, Temu could face fines of up to 6% of its global annual revenue and be subject to stricter regulatory oversight. As one of four China-based platforms designated as Very Large Online Platforms (VLOPs) under the DSA, Temu is facing increased scrutiny alongside rival Shein. This case highlights growing regulatory pressure in Europe on Chinese cross-border e-commerce entities. France has also called for stricter controls in this sector. Temu has not yet issued a response to the European Commission’s preliminary findings.
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EU Preliminarily Finds Temu Violated Digital Services Act Over Illicit Products
The European Commission has issued a preliminary finding that Temu, the Chinese e-commerce platform operated by PDD Holdings, violated the EU’s Digital Services Act (DSA). The violation stems from Temu's failure to adequately assess and mitigate risks associated with illegal products on its site. A mystery shopper investigation revealed that consumers in the EU are likely to encounter unsafe items, including non-compliant baby toys and electronics. Furthermore, the Commission deemed Temu’s October 2024 risk report inadequate because it relied on generic industry data rather than addressing platform-specific risks. If these findings are confirmed, Temu could face fines of up to 6% of its global annual revenue and be subject to stricter regulatory oversight. As one of four China-based platforms designated as Very Large Online Platforms (VLOPs) under the DSA, Temu is facing increased scrutiny alongside rival Shein. This case highlights growing regulatory pressure in Europe on Chinese cross-border e-commerce entities. France has also called for stricter controls in this sector. Temu has not yet issued a response to the European Commission’s preliminary findings.
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