Allegations surface against Temu, a significant Chinese company, for flouting European digital regulations
The European Union (EU) is currently investigating Chinese online shopping giant Temu for potential breaches of the Digital Services Act (DSA), raising concerns about illegal product sales, addictive design features, and content recommendation systems.
Illegal Product Sales
EU regulators have found a high risk that consumers encounter illegal or non-compliant products on Temu’s platform. This risk was confirmed through a mystery shopping exercise, which revealed that consumers were very likely to find non-compliant products among the offers, such as baby toys and small electronics that do not meet EU safety standards. The EU criticises Temu’s risk assessment as inaccurate, claiming that it relies on generic industry information rather than detailed data about its own marketplace.
Addictive Design Features
The investigation also probes Temu’s use of design elements that may induce addictive user behavior. These features include pressured selling tactics, forced gamification, and potentially fake discounts aimed at manipulating purchases. These practices raise consumer protection and ethical concerns about how the platform engages users to drive sales.
Content Recommendation Systems
The EU is scrutinising the transparency and functioning of Temu’s product recommendation algorithms. Concerns include whether these systems contribute to promoting illegal or unsafe products and how much control or clarity users and regulators have over such automated content curation.
If the findings are confirmed, Temu could face fines up to 6% of its global turnover and be compelled to implement corrective measures. This underscores the EU’s strong regulatory stance on online consumer protection and platform responsibility.
Background
Temu entered the European Union’s market in 2023 and has an average of 93.7 million monthly active users across the 27-country bloc. The DSA is part of the EU’s reinforced legal weaponry to curb the excesses of Big Tech. Other DSA probes are ongoing for Chinese online retailer AliExpress and social media platforms Facebook, Instagram, X, and TikTok.
The EU aims to curb the influx of cheap packages entering the bloc, with a proposal for a 2-euro flat fee per parcel under discussion. The DSA requires the world's largest tech firms to do more to protect European consumers online and better regulate content. Fines under the DSA can go as high as 6% of a company's total worldwide annual turnover and force it to make changes to address violations.
The EU has accused Temu of breaking its digital rules, joining ongoing investigations into other tech giants. The Republican-dominated judiciary committee of the U.S. House of Representatives has also described the DSA as a "foreign censorship threat." However, the DSA is a crucial step in ensuring online safety and consumer protection for EU citizens.
[1] https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12622-Digital-Services-Act-DSA [2] https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12622-Digital-Services-Act-DSA/documentation/consultation/12622-Digital-Services-Act-DSA-consultation-document-en [3] https://ec.europa.eu/commission/presscorner/detail/en/ip_22_6205 [4] https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_6205
[1] These concerns about Temu's business practices extend beyond illegal product sales, as the EU is also scrutinizing technology-driven features that could potentially induce addictive user behavior and compromise consumer protection.
[2] The investigation into Temu's economy involves examining the transparency and functioning of its content recommendation systems, as well as the role they might play in promoting unsafe or non-compliant products in the world market, particularly within the European Union.
