Temu, EU opens investigation into Chinese e-commerce giant

BRUSSELS - The European Commission announced today, Thursday 31 October, an investigation against Temu, the well-known Chinese e-commerce platform. In the eyes of the EU executive, the company would not do enough to counter the sale of illegal products and avoid forms of addiction on the part of consumers, especially younger ones.

The investigation comes in the context of the Digital Services Act (DSA), which came into full force at the beginning of the year. "We want to make sure that the products sold (on Temu's platform, ed.) comply with EU standards and do not put consumers at risk," Competition Commissioner Margrethe Vestager explained in a statement.

No legal deadline has been set for the conclusion of the investigation. If Temu is found guilty of violating the new digital services regulation, it could be fined up to 6% of its annual turnover. The Chinese company, which is making huge inroads in Europe thanks to a bargain-pricing strategy, is the international version of the Asian e-commerce giant Pinduoduo, which was founded in 2015. Among other things, it offers a plethora of products, including clothes, toys, home decorations, tools and high-tech goods.

The investigation by the EU executive comes after several warnings and written questions were sent to the platform. "This is a promising step, but only a first step. It is now important that the European Commission continues to put pressure on Temu and push the company to comply with the law as soon as possible," said Fernando Hortal Foronda of the European Consumer Organisation (Beuc).

The investigation will first look at the possibly illegal nature of many products sold on the Chinese platform (from medicines to toys).The EU executive will also examine 'the risks associated with the addictive design of the service' for online sales, including reward programmes in the form of games 'that could have negative consequences for the physical and mental well-being of users'.