Illegal products found: Temu must pay 200 million fine
Illegal products, inadequate controls: The EU Commission is asking Temu to pay for violations of the DSA.
The EU Commission has imposed a fine of 200 million euros on the Chinese online marketplace Temu. According to the authority, the company violated the requirements of the Digital Services Act (DSA) because it did not sufficiently assess and mitigate risks posed by certain products on its platform.
The decision was preceded by an investigation that began in autumn 2024. The Commission examined how Temu deals with potentially illegal or unsafe goods. The focus was on products such as toys for children or electronic devices that do not meet the applicable EU safety requirements. According to the authority's assessment, consumers in the EU were at an increased risk of coming across such products.
Flaws in the risk analysis
A key point of criticism concerns the company's risk assessments. The EU Commission accuses Temu of not having sufficiently analysed dangers on the platform. The analyses were based too «heavily on general industry information» and «too little on concrete findings» about the actual offers on the marketplace
In the opinion of the authority, this approach meant that the risks posed by illegal products were not adequately recognised. As a result, these products continued to be displayed to customers.
The Commission emphasises that large online platforms in particular are obliged to regularly analyse systemic risks and implement effective measures against them. These requirements are among the central components of the Digital Services Act.
Algorithms also in focus
In addition to the risk assessments, the EU Commission also scrutinised the functioning of the platform. This included the question of what influence recommendation systems have on the distribution of problematic products.
The authority came to the conclusion that Temu had not sufficiently considered the potential impact of these systems. This could give illegal offers additional visibility and reach a larger number of users.
The penalty that has now been imposed is one of the highest sanctions ever imposed under the Digital Services Act. One of the EU's aims with the Act is to prevent large online platforms from doing too little to combat illegal content or unlawful products.
Other investigations are still ongoing
The fundamental dispute between Brussels and Temu does not end with the fine. The Commission is still investigating certain other areas of the company. These include the access of researchers to platform data.
Temu must also submit an action plan. In it, the company is to set out how it intends to remedy the shortcomings identified in its risk analysis and handling of problematic products. The EU Commission will then examine whether the proposed measures are sufficient.
Temu rejects the accusations. The company stated that it supports the aims of the Digital Services Act and is in favour of clear rules for digital platforms. Temu also considers the level of the fine to be disproportionate. This is reported by Reuters. Of course, this does not change the court judgement.
I've been tinkering with digital networks ever since I found out how to activate both telephone channels on the ISDN card for greater bandwidth. As for the analogue variety, I've been doing that since I learned to talk. Though Winterthur is my adoptive home city, my heart still bleeds red and blue.
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