EU fines Temu for failing to stop sale of illegal and dangerous products

EU regulators have fined the Chinese shopping website Temu €200m (£173m) for failing to stop the sale of illegal and dangerous products.The European Commission imposed the penalty after a 19-month investigation that found consumers were very likely to encounter illegal or unsafe products including baby toys and electronics on the firm’s website.An unpublished mystery shopping exercise carried out for the commission found a “high percentage” of unsafe baby products and a “very high percentage” of dangerous chargers for sale on the platform, as well as unsafe clothes and jewellery.Consumer groups across Europe have previously reported baby toys with loose parts presenting choking hazards, dummy chains long enough that they could strangle a child, jewellery laced with dangerous metals including lead, clothes made with banned chemicals and chargers that posed risks of burns, electric shocks or fire.The commission also criticised Temu over inadequate controls on the design of its website. Recommender systems and promotions by influencers “could amplify dissemination risks of illegal products” it said.The €200m fine is the second and highest-ever imposed under the EU’s Digital Services Act (DSA), which has applied to the world’s biggest tech companies since February 2024. It follows a €120m penalty issued to Elon Musk’s X last December for “deceptive” verification badges and lack of transparency over advertising.A senior EU official said the commission had found a particularly serious breach of the act related to an inadequate risk assessment on unsafe products that Temu carried out in 2024.The fine represents only a fraction of Temu’s fast-growing revenues. Its parent company, PDD Holdings, reported global revenues of $54bn (£40bn) in 2024, although this included income from another popular Chinese e-commerce site, Pinduoduo. Under the DSA a company can be fined up to 6% of global turnover.The senior EU official said the fine was proportionate and that other parts of the investigation into Temu, which could also lead to financial penalties, were continuing. The commission is also looking into the sale of illegal products, addictive design and whether independent researchers had access to Temu’s data.Temu has 130 million consumers in the EU, almost a third of the population. Once nicknamed the price butcher, it offers a vast range of very cheap products and has become a market leader in many countries.The DSA is intended to protect people from a wide range of online harms, ranging from disinformation and age-inappropriate content to dodgy products.The European Commission vice-president who leads on tech regulation, Henna Virkkunen, said: “Temu’s risk assessment underestimates concrete risks, lacks specificity, is not grounded in solid evidence, and is not comprehensive. It leaves regulators, users and the public in the dark about the true scale of potential harm posed by illegal products sold on Temu.“Now it is time for Temu to comply with the law.”Temu, which has the right to appeal against the fine, said it was “reviewing the decision carefully and considering all available options”.A spokesperson for the company said: “Temu respects the objectives of the Digital Services Act and the need for clear, consistent rules across the digital economy. However, we disagree with the European Commission’s decision and consider the fine to be disproportionate.“The decision relates to our first DSA assessment in 2024 and does not reflect the current state of our systems. Temu engaged constructively with the commission throughout the process and has since taken further steps to strengthen risk assessment, platform governance, and user protection.”Temu has until 28 August to submit an action plan to the commission setting out how it intends to remedy the situation.