Temu, the fast-rising Chinese e-commerce platform, has been flagged by the European Commission for enabling the sale of dangerous, non-compliant products across its marketplace and failing to comply with important aspects of the Digital Services Act (DSA).
Following a mystery shopping operation led by the Commission, inspectors found that a number of items sold on Temu, including baby toys and small electronics, did not meet EU safety standards. Many of these items were direct threats to users, such as choking hazards, electrocution risks, and potential exposure to toxic substances.
These findings were supported by the European consumer watchdog BEUC, which has long raised alarms about the unchecked inflow of unsafe imports via online platforms.
The Commission concluded that Temu’s October 2024 risk assessment was both flawed and superficial. Instead of analysing data specific to its own operations, Temu allegedly relied on vague, industry-level information to justify compliance. That approach, the Commission noted, is not acceptable for a platform with the scale and influence of Temu.
“The evidence showed that there is a high risk for consumers in the EU to encounter illegal products on the platform,” the Commission stated. “Specifically, the analysis of a mystery shopping exercise found that consumers shopping on Temu are very likely to find non-compliant products among the offer, such as baby toys and small electronics.”
Temu, which is classified as a Very Large Online Platform (VLOP) under the DSA, is subject to stricter regulatory expectations, particularly around product safety, algorithm transparency, and user protections. These platforms are not only required to remove harmful content and goods quickly but must also actively mitigate systemic risks on their platforms.
If the preliminary findings are upheld, Temu could face a fine of up to 6% of its global annual turnover, a penalty that could easily exceed $1.5 billion, given the financial muscle of its parent company, PDD Holdings. This would represent one of the most forceful enforcement actions under the DSA since its implementation.
A Temu spokesperson responded, saying the company would continue to “cooperate fully” with the European Commission.
Before now, the Commission also flagged the platform’s gamified shopping experience, pointing to potentially manipulative features such as fake discounts, time-limited rewards, and addictive design patterns aimed at encouraging compulsive buying.
These dark patterns, tactics designed to nudge users into decisions against their best interest, are being investigated for violating transparency and ethical standards under EU law.
Furthermore, regulators are probing how Temu’s recommendation systems work. The core question is whether the platform gives users the option to receive non-profiled suggestions, an essential requirement under the DSA designed to protect user privacy and prevent algorithmic exploitation.
The EU’s investigation into Temu puts it in the same regulatory spotlight as other China-based platforms such as Shein, AliExpress, and Wish, all of which have been warned for allowing the sale of unsafe products and employing manipulative design features.
In parallel, EU policymakers are also debating the removal of the €150 duty-free threshold for imported parcels. This change would hit Temu’s core business model hard, as the platform thrives on high-volume, low-cost deliveries that currently escape import taxes.
For now, Temu has a limited window to respond to the Commission’s findings before a final decision is made.
