European Fee units its regulatory crosshairs on Temu for unlawful product gross sales

Temu is the newest platform the European Fee (EC) has fastened its regulatory gaze upon. Europe’s prime client enforcement authority said Thursday it’s opening a proper investigation into the web retailer for enabling the sale of unlawful merchandise, together with limiting the reappearance of beforehand suspended “rogue merchants” with a historical past of hawking prohibited items.

Along with the unlawful product allegation, the EC can also be investigating Temu’s doubtlessly addictive design, the platform’s techniques that advocate merchandise and information entry for researchers. The alleged violations fall beneath the Digital Services Act (DSA), which empowers the EC to levy fines of as much as six % of Temu’s annual income.

In a press release to Engadget, an organization spokesperson stated it plans to cooperate totally. “Temu takes its obligations beneath the DSA critically, repeatedly investing to strengthen our compliance system and safeguard client pursuits on our platform,” the Temu spokesperson wrote. “We’ll cooperate totally with regulators to assist our shared purpose of a secure, trusted market for shoppers.”

Temu added that it’s in discussions to affix the “Memorandum of Understanding (MoU) on the sale of counterfeit items on the web,” a collective of on-line retailers (facilitated by the EC) that collaborates to stop faux product gross sales in Europe. “We will verify that we’re in discussions to affix the initiative,” the Temu spokesperson informed Engadget. “Counterfeiting is an industrywide problem, and we consider that collaborative efforts are important to advancing our shared objectives of defending shoppers and rights holders.”

The EC’s formal proceedings observe a preliminary threat evaluation report Temu supplied the EU on the finish of September, its replies to the Fee’s formal requests in June and October and data shared by third events. As Bloomberg notes, Meta, X, AliExpress and TikTok are additionally going through DSA investigations.

The US, which generally lags far behind the EU in reining in Large Tech, stated in September it could examine Temu, too. Leaders of The Shopper Product Security Fee (CPSC) ordered staff to evaluate concerns about “lethal child and toddler merchandise” on the platform.

Among the many EC’s considerations are whether or not Temu’s techniques are designed to stop the reappearance of beforehand suspended merchants and non-compliant merchandise. It can additionally have a look at the platform’s doubtlessly addictive gamified reward applications and its techniques to mitigate the dangers from addictive design decisions that would hurt prospects’ psychological well-being. It can examine Temu’s parameters used to advocate items (the Fee desires not less than one “simply accessible choice that’s not based mostly on profiling”) and whether or not the corporate complies with the DSA’s requirement to offer researchers with publicly accessible information.

The EC doesn’t set authorized deadline for finishing DSA investigations. As soon as concluded, the Fee will resolve whether or not to carry the hammer down, settle for voluntary commitments to treatment the issues or drop the case.