European Union regulators have imposed a €200 million ($232 million) fine on Chinese online retailer Temu for failing to safeguard consumers from illegal products, including hazardous toys and unsafe electronics. The penalty, announced Thursday, follows an investigation that revealed the platform exposed users to high risks from non-compliant goods.
Investigation Findings
The European Commission, the EU's executive arm, issued the fine under the Digital Services Act (DSA), a comprehensive rulebook requiring online platforms to enhance user safety against harmful content and dangerous products. The investigation included a "mystery shopping exercise" that uncovered numerous non-compliant items, such as electronic chargers failing basic safety tests and baby toys with excessive chemical levels or detachable parts posing suffocation risks.
Temu's Response
Temu expressed disagreement with the decision, calling the fine "disproportionate." The company stated that the penalty relates to the Commission's initial DSA evaluation in 2024 and does not reflect its current systems. It noted constructive engagement with the Commission and subsequent steps to strengthen risk assessment, platform governance, and user protection.
Platform Details
Temu, known for offering cheap goods shipped from Chinese sellers, has 92 million users in the EU. It is owned by PDD Holdings Inc., which also operates the popular Chinese e-commerce site Pinduoduo. The European Commission criticized Temu for failing to adequately identify, analyze, and assess systemic risks from illegal products, leaving regulators and consumers unaware of potential harm.
Consequences and Next Steps
European Commission Executive Vice-President Henna Virkunnen emphasized that risk assessments are not mere box-ticking exercises. She stated that Temu's assessment underestimates concrete risks, lacks specificity, and is not grounded in solid evidence. The company must submit an "action plan" by the end of August to address the issues, or face additional daily, weekly, or monthly fines.
