The European Commission has initiated an investigation against Temu, probing its compliance with the Digital Services Act.
- Concerns have arisen over Temu’s potential failure to implement systems preventing suspended traders from returning to the platform.
- The company’s sales tactics, labeled as ‘addictive,’ using rewards similar to games, are under scrutiny for consumer risk.
- Margrethe Vestager emphasized the need for Temu to align with EU standards to maintain a fair and safe market.
- Allegations include insufficient seller information provided to consumers, raised by a pan-European consumer group.
The European Commission has launched a formal investigation into Temu, raising concerns about its adherence to the new Digital Services Act (DSA). This move comes on the back of fears that Temu may not be effectively halting the sale of illegal goods on its platform. The probe aims to identify whether systemic issues exist within Temu’s operations that contravene the DSA.
One primary concern revolves around Temu’s capability to prevent ‘previously suspended rogue traders’ from reappearing shortly after being removed, indicating potentially weak enforcement systems. Such lapses could result in illegal goods making a swift return to the marketplace, posing risks to consumers and the market’s integrity.
The investigation also scrutinizes Temu’s aggressive sales strategies, which reportedly involve ‘game-like rewards’ designed to be addictive. This approach, deemed as having the potential for consumer harm, draws attention to the ethical responsibilities of e-commerce platforms in ensuring consumer protection.
Margrethe Vestager, Executive Vice-President for a Europe fit for the Digital Age, remarked on the necessity for Temu to comply with the DSA, insisting that products sold must not harm consumers and must meet EU standards. Her comments underline the EU’s commitment to fostering a level playing field where all platforms respect laws that maintain market safety and fairness.
Further allegations against Temu include failing to adequately inform shoppers about the sellers on its platform. This issue was highlighted by a complaint from a pan-European consumer group, which accused the company of breaching DSA terms. The initial complaint was made in May, with 17 other EU member states also filing reports regarding similar grievances.
The ongoing investigation will determine if Temu’s current practices align with EU regulations and the Digital Services Act.
