The European Union has called on Chinese e-commerce marketplace Temu to further question its compliance with several provisions of the bloc’s online governance framework, the Digital Services Act (DSA), including measures to prevent the sale of illicit goods. Information has been requested. On the platform.
Last May, dozens of consumer protection groups filed a joint complaint against Temu, putting pressure on the European Commission to investigate many of their concerns, including areas such as trader traceability and design of manipulation.
The DSA imposes legal requirements on large platforms to assess the various systemic risks their services may pose to EU users in areas such as minor protection and public health, and to take proactive steps to mitigate potential harm.
The regulations also impose transparency requirements that require platforms to provide details about the logic of the algorithmic systems they use to recommend content to users.
Penalties for non-compliance with DSA can be severe, reaching up to 6% of global annual turnover.
In a press release issued on Friday, the commission said it had asked Temu for further information on mitigating risks associated with the sale of illicit products. Additionally, details are provided (“More Information and Internal Documents”) on how the platform identifies traders selling illegal goods and what mitigation measures it uses to ensure problem sellers cannot find their way and resume selling illegal goods. .
The EU is also questioning Temu’s approach to consumer protection risks, public health risks and user wellbeing risks. And the block wants more information about Temu’s recommendation system and its approach to protecting user data.
The e-commerce platform was given until October 21 to provide the requested information.
Everyday, millions of Europeans buy all sorts of products on Temu.
We are concerned about the possible presence of traders selling illegal products on the platform.
Today we formally request @shoptemu to provide information on the mitigation measures taken against such risk
— Margrethe Vestager (@vestager) October 11, 2024
If the EU is not satisfied with Temu’s response, it may request more data. Alternatively, we may initiate formal investigation proceedings if we suspect a violation of the e-commerce platform’s regulations.
The Commission’s initial request for information (RFI), sent last June to Temu and Shein, another ultra-low-cost e-commerce platform, consisted of similarly broad requests. The EU then sought information on “notice and action” mechanisms (e.g. how users can report problems/illegal products). interface design; protection of minors; transparency of the recommendation system; trader traceability; and “compliance by design.”
The commission’s investigation has not yet converted into a formal investigation into the e-commerce platform. However, Temu has been subject to centralized supervision by the Commission since May, when it was designated a so-called VLOP (Very Large Online Platform).
The designation allows Temu to comply with the DSA’s additional layer of risk mitigation and algorithmic liability rules for large platforms by the end of September. The EU is therefore expected to move quickly in response to public pressure from consumer protection groups raising concerns and demanding action.
In a statement on Friday, the European Consumer Organization (BEUC) welcomed the development.
“It is good news that the Commission has urgently requested further information to ensure that Temu complies with a number of its obligations under the DSA. This follows up on our complaint from May, which raised a number of troubling issues at Temu, including a lack of transparency about who the sellers on the platform are and how the referral system works,” said BEUC’s head of digital policy. I wrote it. Fernando Ortal Foronda.
“We believe Temu is disappointing consumers and likely violating the law. Various member tests conducted over the past year on dangerous and illegal products point to systemic problems that Temu is currently failing to adequately address. “We now expect urgent change from Temu and hope this will be the beginning of the end for consumers’ exposure to Temu’s harmful practices.”
Temu has been contacted for response to the latest Commission RFI.
