The European Union has levied a significant €200 million fine on the Chinese-owned online retailer Temu for allowing the sale of dangerous and illegal products, including hazardous baby toys and faulty chargers, on its platform. The European Commission announced the penalty, stating that Temu failed to adequately identify and mitigate the systemic risks posed by these items to consumers.
EU’s Digital Services Act Under Scrutiny
Temu has been under investigation since October 2024, specifically examining its compliance with the EU’s Digital Services Act (DSA). As a designated Very Large Online Platform (VLOP), Temu is subject to stringent obligations regarding content moderation and risk assessment.
The investigation included a mystery shopping exercise conducted by an independent testing organization. This exercise revealed a high percentage of chargers purchased from Temu failed basic electrical safety tests. Furthermore, a significant proportion of baby toys examined posed safety risks, either containing chemicals exceeding legal limits or featuring small, detachable parts that presented suffocation hazards, as reported by Euronews.
Temu’s Response and Future Obligations
A spokesperson for Temu stated that the company disagreed with the decision, deeming the fine disproportionate. They indicated that the decision pertains to past practices and does not reflect the current state of their systems. Temu is currently reviewing the decision and considering all available options.
Beyond the financial penalty, Temu is required to submit an action plan by August 28 to address the identified failures. The European Commission will then have two months to assess whether the company has taken sufficient steps to comply with the DSA.
Broader Implications for Online Retailers
EU tech commissioner Henna Virkkunen emphasized that the fine sends a strong message to online platforms regarding their responsibilities. This action marks the second significant fine imposed under the DSA for content-related issues, following a €120 million penalty against X (formerly Twitter) in December 2024.
Consumer organizations have lauded the EU’s decisive action. Sue Davies, head of consumer protection policy at UK consumer group Which?, praised the move and urged the UK government to adopt similar measures. She advocated for making online marketplaces legally responsible for dangerous products sold on their platforms, leveraging new powers under the UK’s Product Regulation and Metrology Act.
What to Watch Next
The EU’s enforcement of the Digital Services Act is likely to intensify, setting a precedent for how other large online platforms will be held accountable for the safety of products sold through their marketplaces. Consumers can expect increased scrutiny of online offerings, and platforms will face greater pressure to implement robust risk assessment and product safety protocols. The effectiveness of Temu’s forthcoming action plan and the Commission’s subsequent evaluation will be closely watched, potentially influencing regulatory approaches in other jurisdictions.
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