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Chinese online retailer Temu will be investigated to determine whether it violated EU technology rules banning the sale of illegal products, the European Union’s technology regulator said on Thursday, a move that could result in the company facing huge fines.
The EU investigation will also focus on the potentially addictive design of the Temu service, including its game-like rewards program and system for recommending purchases to users.
Following a complaint from pan-European consumer group BEUC and 17 of its organizations, the European Commission launched an investigation under the Digital Services Act (DSA), which requires large online platforms such as Temu to do more to address issues on their platforms. Illegal and harmful content.
Temu is a subsidiary of the Chinese e-commerce giant and has 92 million users across 27 countries in the EU Pinduoduo Holdings.
The EU technical enforcement agency will also investigate whether Temu complies with the DSA’s obligation to provide researchers with access to its publicly accessible data.
“We want to ensure that Temu complies with the Digital Services Act. In particular, ensuring that products sold on its platform comply with EU standards and do not harm consumers,” EU antitrust and technology chief Margrethe Vestager Vestager said in a statement.
If found guilty of breaching the DSA, Temu could face fines of up to 6% of its global turnover.
