According to Reuters, Chinese cross-border e-commerce platform Temu has been hit with a major fine by the European Union for allegedly failing to effectively prevent illegal products from being sold on its platform. On Thursday, May 28, EU technology regulators announced a €200 million (approximately US$232 million) fine against Temu.
Under the EU’s Digital Services Act (DSA), large online platforms are required to take stronger measures to combat illegal and harmful content on their platforms, Reuters reported.
The EU stated that the investigation has been ongoing for nearly two years, and additional penalties could still be imposed in the coming months.
The investigation was launched following complaints filed by the pan-European consumer organization BEUC and 17 of its member organizations.
The European Commission said Temu failed to adequately identify, analyze, and assess the systemic risks posed by illegal products on its platform, and also failed to effectively prevent harm to EU consumers.
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Regulators criticized Temu for not properly evaluating how its recommendation systems and influencer marketing partnerships could further amplify the spread of illegal goods.
The European Commission argued that under the DSA, large online platforms have a responsibility to proactively manage platform risks, rather than only responding after problems arise.
According to Deutsche Welle, before issuing the fine, EU regulators conducted a “mystery shopping” test. During the operation, investigators discovered multiple non-compliant products, including many electronic chargers that failed to meet basic safety standards.
Investigators also found a high proportion of unsafe baby toys. Some contained chemical substances exceeding safety limits, while others had detachable parts that posed choking hazards.
Temu claims 130 million users
Since entering the EU market in 2023, Temu has reportedly grown to 130 million users, largely attracting consumers with its low-cost products shipped directly from Chinese sellers.
Temu responded in a statement saying the company respects the goals of the DSA and agrees that the digital economy requires clear and consistent regulatory rules. However, it disagreed with the European Commission’s decision, arguing that the fine was disproportionate.
Temu also claimed that the penalty was based on conditions observed during its first DSA assessment in 2024 and does not reflect the platform’s current systems and practices.
Under EU requirements, Temu must submit a corrective action plan by Aug. 28 outlining how it intends to improve platform governance and reduce the risks posed by illegal products. EU regulators will then review the proposal and are expected to decide within two months whether Temu meets DSA compliance standards.
EU technology chief Henna Virkkunen said risk management is one of the core principles of the Digital Services Act.
She stated, “Through this decision, we are sending a very strong message to Temu.”
Virkkunen also revealed that the EU plans to broaden its investigation into Temu, including examining whether the platform’s design is “addictive,” whether illegal goods continue to circulate on the platform, and whether researchers have sufficient access to platform data.
Under the DSA, companies found to have committed serious violations can be fined up to six percent of their global annual revenue.
This marks the EU’s second major penalty issued under the Digital Services Act. Last December, social media platform X, owned by Elon Musk, was also fined €120 million for violating related regulations.
