The European Commission issued a €200 million fine to online retailer Temu for failing to assess and mitigate the risks posed by illegal and unsafe products on its platform.
According to the Commission, EU consumers are “very likely to encounter illegal items on Temu.” The decision follows an investigation that found the company’s 2024 risk assessment did not meet the requirements set out under the Digital Services Act (DSA).
Safety risks
The commission’s findings involved a mystery shopping investigation, performed by an independent testing organisation, the BBC reported.
Based on the evidence at the Commission’s disposal, EU consumers are likely to encounter illegal items on Temu.
“Evidence shows that a very high percentage of the selected chargers failed basic safety tests, while a high percentage of tested baby toys posed safety risks of medium to high severity, as they contain chemicals exceeding legal safety limits or pose suffocation hazards due to detachable parts,” the Commission stated.
Beyond this, the regulator also concluded that Temu did not evaluate adequately how certain features of its service contribute to the spread of the illegal goods. The Chinese giant’s 2024 risk assessment was based on general information about risks concerning the eCommerce sector as a whole rather than on specific evidence about Temu’s own services, as per the Commission.
DSA as an obligation
“Risk assessments are not box‐ticking exercises – they are the backbone of the DSA,” said Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, in a press statement.
“Temu’s risk assessment underestimates concrete risks, lacks specificity, is not grounded in solid evidence, and is not comprehensive. It leaves regulators, users, and the public in the dark about the true scale of potential harm posed by illegal products sold on Temu. Now it is time for Temu to comply with the law.”
The Commission has given Temu until August 28, 2026, to submit an action plan outlining the measures to tackle the problems and “remedy the breach of its risk-assessment obligations.”
Unfair competition
The decision was welcomed by European retailers and e-commerce organisations, which see non-compliant online marketplaces gain an advantage over businesses that invest in meeting EU regulations.
“The €200 million fine imposed on Temu is sending a strong and, what we also believe, necessary signal: that EU rules must be enforced fairly and consistently across all players active in the EU market, no matter where they are based,” said Luca Cassetti, Secretary General of Ecommerce Europe, a non-for-profit association representing companies selling goods and services online to consumers in Europe.
Cassetti added that one of their members estimated that non-compliant players offer products at at least 40% lower prices. “This apparent price difference between compliant and non-compliant companies shows the significant advantage that non-compliant businesses currently enjoy,” he underscored to 150sec.
Meanwhile, Stephan Tromp, Deputy Managing Director of the German Retail Federation (HDE), said the fine should be part of a broader effort to address rule violations by major low-cost online retailers.
“If the penalties are not convincing, we will continue to receive unsafe products on our market and to domestic consumers,” Tromp said.
“It is not only an issue of consumer protection but also an issue of unfair competition,” Cassetti concluded.
Featured image: vhtm via Unsplash+
