The European Union has launched a formal investigation into Chinese shopping platform Temu, citing concerns that the platform sells illegal products and is designed in a way that is addictive to users.
“There are real suspicions that not enough is being done – not in an effective way – to really prevent the distribution of illegal products,” a European Commission official told reporters on Thursday morning, declining to be named. Potentially illegal products include pharmaceuticals, toys and cosmetics, they said.
Although Temu often removes illegal products, these products reappear very quickly, another official said. “So we believe that some of the controls in place are not working properly.”
Earlier this year, trade association Toy Industries of Europe published a report warning that none of the 19 toys bought from Temu.com complied with EU legislation. After sending the toys to a lab for testing, they claimed many of them posed a significant risk to children. The group said a baby rattle included sharp edges and the chemicals in Temu’s slime kit were 11 elements above the legal limit for toys.
“Our enforcement will ensure a level playing field and that every platform, including Temu, fully respects the laws that keep our European market safe and fair for all,” Commissioner Margrethe Vestager, who oversees competition and digital policy, said in a statement.
Officials also said they were concerned about Temu’s addictive design and referral systems, as they included rewards games and endless scrolling.
Concerns about Temu’s addictive design echo another recent EU investigation into a TikTok rewards program launched in France and Spain in April. TikTok Lite, a basic version of TikTok itself, offered to pay users a few cents a day for watching videos. Following the announcement of EU concerns, TikTok’s parent company ByteDance removed the feature from the region.
Temu will not be launched on the European market until April 2024. and his rise was meteoric. As of September, Temu had more than 90 million users in the EU, meaning it is subject to the strictest rules under the Digital Services Act. The law, which came into effect last year, allows regulators to fine companies up to 6 percent of their global turnover. In March, AliExpress became the first online marketplace to face an investigation under the Digital Services Act.
Temu can now provide data to prove that the EU’s suspicions are unfounded, or it can make changes to the platform to avoid fines. The investigation does not have to be completed by a specific deadline.
“This decision by the Commission is a promising step, but only the first,” Fernando Hortal Foronda, digital policy officer at the European Consumer Organization (BEUC), said in a statement on Thursday. “It is now important that the Commission continues to put pressure on Temu and insist that the company comply with the law as soon as possible.”
