The European Commission is starting a formal investigation into Temu, to see if the platform does enough to combat the sale of illegal products, amongst other issues. It also has ongoing investigations into other platforms, like AliExpress.
This summer, online marketplaces Temu and Shein were already requested by the European Commission to share detailed information on several aspects of their services. But the organization is now launching a further, formal investigation into Temu. This could negatively impact the marketplace’s growth rates in Europe, as was recently predicted by Forrester.
Compliance with DSA
The commission wants to assess if Temu has breached the Digital Services Act (DSA). It will do so by focusing on the systems that Temu has in place to limit the sale of illegal products. The platform is accused of letting formerly suspended sellers back on the platform.
Temu is accused of letting formerly suspended rogue sellers back on the platform
The Commission is also investigating the risks linked to the addictive design of the platform, like reward programs. It wants to assess what Temu has put in place to mitigate these risks. Additionally, it is investigating how Temu recommends products and content to users.
Gathering more evidence
Now that formal proceedings are opened, the Commission can continue gathering evidence. It will send additional requests for information to Temu or third parties. It can also conduct monitoring actions or interviews.
Temu has said that it takes the obligations seriously and that it is investing in strengthening its regulatory regime and consumer protection. “We will fully cooperate with regulators to support our shared goal of a safe and trusted marketplace for consumers”, it said.
