The Commission said that consumers are ‘very likely’ to find non-compliant products on Temu.
The European Commission’s preliminary assessment has found that Temu breached the Digital Services Act (DSA) by failing to properly assess the risks of illegal products being sold on its online marketplace.
In its findings published today (28 July), the Commission said that there is a “high risk for consumers in the EU to encounter illegal products” on Temu. It said that consumers are “very likely” to find products non-compliant with EU regulations such as baby toys and small electronics.
An assessment by independent consumer organisation BEUC made similar findings recently, reporting that a high number of toys purchased from Temu contain illegal amounts of borates – which can damage reproductive systems – and hormone-disrupting chemicals called phthalates.
Moreover, the Commission said that the risk assessment Temu submitted last year appeared to be “inaccurate” and relied on general industry information rather than details about its own marketplace.
The Commission said it will continue its investigation into the retailer, including probing the effectiveness of its mitigation measures, the use of addictive design features, the transparency of its recommendation systems and its access to data for researchers.
Temu is headquartered in the US, while its parent company PDD Holdings has been located in Dublin since 2015. Together with its sister company under PDD called Pinduoduo platform, the two made nearly $54bn in revenue in 2024 with a net income of nearly $15.5bn.
The Commission opened its investigation into Temu last October. Temu, with a monthly user base of 75m, was designated as a very large online platform under the DSA earlier in 2024, which means that the company is subject to the “most stringent rules” under the act as well as being subject to certain obligations.
The retailer could be up for a penalty of up to 6pc of its total worldwide annual turnover if found non-compliant by the EU in its final decision.
“We shop online because we trust that products sold in our single market are safe and comply with our rules. In our preliminary view, Temu is far from assessing risks for its users at the standards required by the Digital Services Act,” said Henna Virkkunen, the EU executive vice-president for tech sovereignty, security and democracy.
Earlier this year, the Commission and the EU’s Consumer Protection Cooperation Network found that Shein breached the region’s consumer laws.
The consumer protection watchdog said that Shein employs a number of practices that breach EU laws. These include providing false or deceptive information about the sustainability aspects of a product, displaying incomplete and incorrect information about consumers’ legal rights to return purchased products and receive refunds – and even failing to process returns and refunds in line with those rights.
All the while making it difficult for consumers to contact the e-retailer, the Commission found in its scathing report.
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