EU investigates Temu over digital law breaches
November 5, 2024
Brussels targets Temu’s practices under strict new Digital Services Act rules.
The European Commission has launched formal proceedings against online retail giant Temu for potential violations of the Digital Services Act (DSA). The allegations focus on the sale of illegal products, user data access for researchers, and the potential psychological impact of the platform’s addictive design features.
The decision, announced in Brussels, marks the first such enforcement action since the DSA came into effect earlier this year, setting the stage for a thorough examination of the platform’s adherence to EU digital safety and consumer protection standards.
The investigation is expected to probe into several core areas of Temu’s operations, including the systems in place to prevent the sale of unsafe products, mechanisms to reduce the recurrence of non-compliant goods, and the efficacy of user protections against potentially addictive features like game-based reward programs.
Margrethe Vestager, the Commission’s Executive Vice-President for a Europe Fit for the Digital Age, emphasised the seriousness of the probe: “Our enforcement will guarantee a level playing field and ensure that every platform, including Temu, fully respects the laws that keep our European market safe and fair for all.”
Among the products Temu offers to European consumers are printer cartridges, which are often sold by third-party vendors. The platform has faced questions regarding the quality and compliance of such goods, as EU regulators seek assurances that all items meet the bloc’s safety and environmental standards. Online marketplaces like Temu, which offer a variety of consumables from external sellers, are required under the DSA to implement robust checks on products sold through their channels, especially where non-compliant or counterfeit goods may harm consumers or damage devices.
Concerns have also been raised over Temu’s compliance with the DSA, especially since the platform was designated a Very Large Online Platform (VLOP) earlier this year. Following this classification, Temu was obligated to implement heightened measures to manage systemic risks, including transparency in its recommender systems. Under the DSA, these systems must allow users a non-profiling-based recommendation option, ensuring personal data is not the sole driver behind targeted content.
Another focus of the inquiry lies in Temu’s accessibility for researchers examining its data compliance practices. The DSA mandates that VLOPs provide access to publicly accessible data for research purposes, enabling oversight into algorithms and potential impacts on users. The Commission’s assessment will determine if Temu has made this access appropriately available or if additional actions are required to meet DSA transparency standards.
The probe into Temu’s compliance with DSA Articles 27, 34, 35, 38, and 40 has wide-ranging implications for other digital platforms that also face these strict requirements. If found non-compliant, Temu could face sanctions, potentially including fines and operational restrictions within the EU. However, the opening of formal proceedings does not prejudge the investigation’s outcome, nor does it rule out potential enforcement by national consumer protection authorities.
A Temu spokesperson said: “Temu takes its obligations under the DSA seriously, continuously investing to strengthen our compliance system and safeguard consumer interests on our platform. We will cooperate fully with regulators to support our shared goal of a safe, trusted marketplace for consumers.
“In a separate development, we can confirm that we are in discussions to join the “Memorandum of Understanding (MoU) on the sale of counterfeit goods on the Internet,” a voluntary agreement facilitated by the European Commission. Counterfeiting is an industrywide challenge, and we believe that collaborative efforts are essential to advancing our shared goals of protecting consumers and rights holders.”
Temu, which now reports over 92 million active EU users monthly, will have to work closely with the Commission to address these issues. The case may set a precedent in how the DSA will be enforced, particularly for VLOPs, whose scale poses unique regulatory challenges. With the outcome pending, the proceedings underscore the EU’s commitment to holding digital giants accountable to stringent standards that protect users and foster a safer online marketplace.
Categories : World Focus
Tags : Compliance Consumer Protection DSA EU Law Temu
