European Commission launches investigation into Temu

Business

Campaign photo of Temu. Credits: Impt.

The European Commission is launching an investigation into Chinese e-commerce platform Temu, a subsidiary of PDD Holdings. This was reported by Bloomberg based on anonymous sources. Temu is growing rapidly in Europe thanks to its low-price strategy. The platform is the international version of Chinese e-commerce giant Pinduoduo, founded in 2015, and offers a wide range of products, from clothing to shoes and accessories.

According to Bloomberg, Temu is believed to have violated the rules of the Digital Services Act (DSA). This European legislation targets "very large online platforms" (VLOPs), such as companies that have more than 45 million active users. VLOPs must take extra measures to combat illegal content and counterfeit products.

In May 2024, the Commission designated Temu as a VLOP. This allows the Commission to request additional information at any time about the steps Temu is taking to create a safe online sales environment.

Temu under the microscope in Europe

Under the slogan "Europe fit for the digital age", the EU designated the first 19 VLOPs and Very Large Online Search Engines (VLOSEs) on 25 April 2023. "Their main aim is to prevent illegal and harmful online activities and the spread of disinformation. It ensures users' safety, protects fundamental rights and creates a fair and open online platform environment," the Commission said in a press release.

The European Commission is keeping a close eye on Temu. It previously requested information from the company and its competitor Shein to check whether they comply with EU consumer protection rules. There are concerns that Temu does not sufficiently protect minors from unnecessary purchases and that the platform is unclear about its product recommendation systems and the traceability of sellers.

In addition, European consumer associations filed a complaint against Temu in May, accusing the platform of using misleading interfaces, known as “dark patterns,” to manipulate consumers and encourage them to spend more.

FashionUnited has contacted Temu but has not yet received a response to a request for comment.

This article originally appeared on FashionUnited.NL. It was translated to English using an AI tool called Genesis and edited by Rachel Douglass..

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