The EC has launched an official investigation into Temu for possible violations of the Digital Services Act. The platform may face fines of up to 6% of annual revenue for failing to comply with security and transparency rules.
The European Commission on Thursday launched a formal investigation into the Chinese e-commerce platform Temu for possible violations of the Digital Services Act (DSA), a set of rules of the bloc aimed at limiting the spread of illegal and harmful content on the Internet, UNN reports citing Politico.
Details
Preliminary analysis has shown that Temu may not be able to deal with inappropriate products and fail to address risks associated with the design of its platform that are addictive, such as reward programs, while failing to meet its transparency obligations.
Earlier this month, the European Commission demanded more information from the Chinese company to show how it complies with EU rules – amid growing pressure from bloc governments and consumer protection organizations that claim the platform is dangerous for consumers.
"There is a suspicion that not enough is being done, not effectively, to really prevent the distribution of illegal products," said a European Commission spokesman, briefing journalists before the announcement. – "We have reason to believe that Temu has not properly analyzed the addictive nature" of some of its functions.
In a statement, a Temu spokesperson said that the company "takes its obligations under the DSA seriously, continuously investing in strengthening our compliance system and protecting the interests of consumers on our platform" and "will fully cooperate with regulators.
Addendum
Under the DSA, companies can face fines of up to 6 percent of their annual global revenue if an in-depth investigation, which is not limited by any timeframe, confirms serious violations.
Temu, which has 92 million monthly users in the EU, was recognized in May as a very large online platform (VLOP), which made it subject to stricter rules and direct control by the European Commission.