Chinese online retailer Temu faces European Union investigation into rogue traders and illegal goods

Chinese online retailer Temu is facing a European Union investigation complete suspicions it’s failing to forestall nan waste of forbidden products

LONDON -- Chinese online retailer Temu is facing a European Union investigation complete suspicions it's failing to forestall nan waste of forbidden products, nan 27-nation bloc's executive limb said connected Thursday.

The European Commission opened its investigation 5 months aft adding Temu to nan list of “very ample online platforms” needing nan strictest level of scrutiny nether nan bloc's Digital Services Act. It's a wide-ranging rulebook designed to cleanable up online platforms and support net users safe, pinch nan threat of hefty fines.

Temu started entering Western markets only successful nan past 2 years and has grown successful fame by offering inexpensive goods - from clothing to location products — that are shipped from sellers successful China. The company, owned by Pinduoduo Inc., a celebrated e-commerce tract successful China, now has 92 cardinal users successful nan EU.

Temu said it “takes its obligations nether nan DSA seriously, continuously investing to fortify our compliance strategy and safeguard user interests connected our platform.”

“We will cooperate afloat pinch regulators to support our shared extremity of a safe, trusted marketplace for consumers,” nan institution said successful a statement.

European Commission Executive Vice-President Margrethe Vestager said successful a property merchandise that Brussels wants to make judge products sold connected Temu's level "meet EU standards and do not harm consumers."

EU enforcement will “guarantee a level playing section and that each platform, including Temu, afloat respects nan laws that support our European marketplace safe and adjacent for all,” she said.

The commission's investigation will look into whether Temu's systems are doing capable to ace down connected curb “rogue traders” trading “non-compliant goods” amid concerns that they are capable to swiftly reappear aft being suspended. The committee didn't azygous retired circumstantial forbidden products that were being sold connected nan platform.

Regulators are besides examining nan risks from Temu's “addictive design," including “game-like" reward programs, and what nan institution is doing to mitigate those risks.

Also nether investigation is Temu's compliance pinch 2 different DSA requirements: giving researchers entree to information and transparency connected recommender systems. Companies must beryllium item really they urge contented and products, and springiness users astatine slightest 1 action to spot recommendations that are not based connected their individual floor plan and preferences.

Temu now has nan chance to respond to nan commission, which tin determine to enforce a good aliases driblet nan lawsuit if nan institution makes changes aliases tin beryllium that nan suspicions aren't valid.

Brussels has been cracking down connected tech companies since nan DSA took effect past year. It has besides opened an investigation into different ecommerce platform, AliExpress, arsenic good arsenic societal media sites for illustration X and Tiktok, which bowed to pressure aft nan committee demanded answers astir a caller rewards feature.

Temu has besides faced scrutiny successful nan United States, wherever a Congressional report past twelvemonth accused nan institution of failing to forestall equipment made by forced labour from being sold connected its platform.