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On October 31, the European Union (EU) officially launched an investigation into the e-commerce platform Temu over suspicions that the platform has not taken sufficient action to prevent the sale of illegal products.
Despite only entering the EU market last year, Temu – operated by Chinese e-commerce company PDD Holdings – has quickly dominated the European market with aggressive marketing strategies and competitive pricing.
On average, about 92 million people use the platform monthly in Europe.
In a statement, the European Commission (EC) said the investigation will examine Temu’s systems for monitoring and removing illegal content, the way it proposes products to consumers, and whether the platform complies with its obligation to give market surveillance authorities access to Temu’s public data.
Investigators will also look into potential risks arising from the platform’s design that could have negative consequences for users’ physical and mental health.
The inquiry is being conducted under the EU’s Digital Services Act (DSA), which aims to tighten control over the activities of large-scale tech companies’ online platforms, thereby creating a healthier space for users.
EU Competition Commissioner Margrethe Vestager affirmed that the investigation aims to ensure Temu complies with EU standards and does not harm consumers.
The official added that the EU wants to understand how the Temu platform works to limit the sale of illegal products.
Temu will also have to explain the measures it is taking to address any risks arising from its services, including customer reward programs.
The EU noted that there is no deadline for completing the investigation, and Temu could face heavy fines if violations are found.
For its part, Temu has stated that it will cooperate with the EU. In a statement, a Temu spokesperson affirmed that the platform will take its obligations under the DSA seriously, continue to invest in strengthening law enforcement support measures, and protect the rights and interests of consumers on its platform.
The spokesperson also said that Temu is considering joining a group of major e-commerce platforms and brands to prevent the online sale of counterfeit products in Europe.
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