Violation of DSA: EU takes legal action against Temu

The EU Commission has apparently had enough of the behaviour of online retailer Temu. The authority from Brussels has announced that it is initiating proceedings against the Chinese company. They accuse Temu of various violations of the Digital Services Act.

The Digital Services Act (DSA) is intended to prevent European consumers from falling victim to fraud, unfair advertising or fake news. The respective operators of the portals - so-called very large online platforms (VLOPS) - are held responsible for this. VLOPS are platforms that have more than 45 million users in the EU. Temu has fallen into this category since May 2024.

Lack of efforts against fraud

According to the EU findings, Temu is guilty of the first point in particular. Temu does not prevent (or does too little to prevent) traders with fraudulent intentions or illegal products from selling their goods on the platform. Specifically, the EU Commission fears that consumers are being misled - for example through counterfeit products, copyright infringements or a lack of safety labelling. Apart from this, they allege temu, exploitative working conditions and undeclared environmental pollution. Germany and the Republic of Ireland are leading the complaints. Nevertheless, the EU gives the portal credit for the fact that some concerns have already been resolved and Temu has visibly endeavoured to cooperate quickly and fruitfully.

"Gamification" as an addiction trigger

In addition to illegal products from blocked traders, gamification is also a problem. Temu has various bonus and reward programmes that credit customers with points and bonuses for purchases made in a playful way - often coupled with recommendations as to which products could be bought particularly cheaply with these bonuses. This results in further purchases being made without there really being any reason to do so.

Temu also refuses to provide the EU with information on the criteria used by the system to suggest certain products to customers for purchase. Temu also refuses to give researchers access to data - although this is also mandatory under the DSA.

Aiming for an efficient process

Temu has stated that it takes the DSA obligation very seriously. The company is investing in strengthening its compliance system and in consumer protection. The company plans to continue working closely with the EU Commission. For example, Temu has already voluntarily joined an agreement against the sale of counterfeit goods on the internet.

However, this does not change the proceedings. The spokeswomen for the EU Commission explain that although there is no official deadline, this should be finalised within a year. Temu and the traders active on it must comply with EU standards if they want to trade in the EU. Failure to do so could result in heavy fines or even a ban on the platform in the EU.

Temu is not the only company facing proceedings under the DSA. TikTok, Meta, X and Temu competitor Aliexpress are also in the EU Commission's crosshairs.