The European Union (EU) has initiated an investigation into Chinese online retailer TEMU, following complaints from the European Consumer Organisation (BEUC) and its members. The investigation, launched under the Digital Services Act (DSA), is centered around the platform’s practices, including its game-like reward systems and product recommendation algorithms, which may contribute to addictive user behavior.
EU regulators are worried that TEMU has not taken sufficient measures to prevent the sale of illegal products. They also express concerns about rogue traders reappearing under different identities on the platform.
TEMU’s Response and Potential Consequences
TEMU, a part of PDD Holdings with 92 million users in the EU, has responded to the allegations stating that it takes its compliance responsibilities seriously. The company is actively working to enhance its consumer protection measures and is contemplating joining a voluntary EU initiative to combat counterfeit products.
The investigation will evaluate whether TEMU is adhering to DSA requirements, particularly in terms of providing access to public data for researchers. If found guilty of violations, TEMU could face penalties amounting to up to 6% of its global turnover.
