On October 31, the EU officially sued Temu over concerns that it was failing to prevent the sale of illegal products online.
An official investigation was launched on October 31, with the European Commission raising concerns about the e-commerce platform Temu, a low-cost competitor to Amazon. With the slogan “shop like a billionaire,” the service has grown rapidly in the EU market since its launch in April last year, selling everything from cosmetics to clothing as well as furniture and technology, delivered directly from China to some 100 million users.
The European Commission said it had concerns that the platform, owned by PDD Holdings, was in breach of the new Digital Services Act (DSA), which governs tech companies from Facebook to X and Google. Among them was that the site did not have robust enough systems in place to prevent the re-emergence of “previously suspended fraudulent traders,” whose products sometimes reappeared just days after being removed.
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| EU sues Temu for illegal products |
Concerns have been raised by authorities across Europe about the sale of counterfeit products, pharmaceuticals, cosmetics and toys, particularly in Germany, Denmark and Ireland, where the company is headquartered in the EU. The European Commission has received numerous comments from other authorities, but there is a real suspicion that not enough is being done, and not effectively, to actually stop the spread of illegal products. They suspect Temu has failed to put in place “effective control systems” to “review, monitor and screen what happens on its platform”.
The European Commission is also concerned about sales tactics on the platform with “addictive designs” involving “game-like rewards,” with weak systems to “mitigate the risks arising from such addictive designs.” If found to be in violation of the DSA, the company could face large fines. The EU wants to ensure that Temu complies with the DSA, said Margrethe Vestager, executive vice-president for the digital age portfolio at the European Commission. In particular, ensuring that the products sold on its platform meet EU standards and do not cause harm to consumers.
EU officials said Temu had been “extremely responsive” to the EU investigation, responding “within minutes” to any questions. Temu has grown rapidly, recording 75 million users in the EU in April 2024, rising to 92 million in September. A pan-European consumer group complained to Temu that it had breached the DSA by failing to provide customers with important information about sellers on its platform. The group filed a complaint in May 2024, with 17 EU members including France, Italy and the Netherlands also filing complaints with relevant national authorities. In June this year, the European Commission sent a formal request to Temu and its “rival”, Shein, regarding their formal obligations to design their online interfaces to protect children and to be transparent about the origin of the goods sold.
Fernando Hortal Foronda, digital policy officer at the European Consumer Organisation (BEUC), which filed one of the original complaints, welcomed the Commission’s investigation, saying: “There are many issues that consumer groups have identified with Temu, including the sale of many dangerous or illegal products or the frequent use of design techniques designed to deceive consumers. This decision by the Commission is a promising step, but only a first step.”
Temu said it takes its obligations seriously, continuously investing to strengthen its compliance system and protect consumers' rights on the platform. It announced that it will cooperate fully with regulators to support the common goal of a safe, trustworthy marketplace for consumers. It said it would sign a "memorandum of understanding on the sale of counterfeit goods on the internet," a voluntary agreement. Counterfeiting is an industry-wide challenge, and collaborative efforts are essential to advance the common goals of protecting consumers and rights holders.
Source: https://congthuong.vn/eu-khoi-kien-temu-vi-san-pham-bat-hop-phap-356129.html
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