Procuring on Temu a ‘excessive danger’ for customers, EU finds

The Fee mentioned that buyers are ‘very probably’ to seek out non-compliant merchandise on Temu.

The European Fee’s preliminary evaluation has discovered that Temu breached the Digital Providers Act (DSA) by failing to correctly assess the dangers of unlawful merchandise being offered on its on-line market.

In its findings revealed right this moment (28 July), the Fee mentioned that there’s a “excessive danger for customers within the EU to come across unlawful merchandise” on Temu. It mentioned that buyers are “very probably” to seek out merchandise non-compliant with EU rules equivalent to child toys and small electronics.

An evaluation by unbiased shopper organisation BEUC made related findings not too long ago, reporting {that a} excessive variety of toys bought from Temu include unlawful quantities of borates – which may harm reproductive programs – and hormone-disrupting chemical substances referred to as phthalates.

Furthermore, the Fee mentioned that the chance evaluation Temu submitted final 12 months gave the impression to be “inaccurate” and relied on basic business data somewhat than particulars about its personal market.

The Fee mentioned it would proceed its investigation into the retailer, together with probing the effectiveness of its mitigation measures, using addictive design options, the transparency of its advice programs and its entry to knowledge for researchers.

Temu is headquartered within the US, whereas its guardian firm PDD Holdings has been positioned in Dublin since 2015. Along with its sister firm underneath PDD referred to as Pinduoduo platform, the 2 made practically $54bn in income in 2024 with a web earnings of practically $15.5bn.

The Fee opened its investigation into Temu final October. Temu, with a month-to-month consumer base of 75m, was designated as a very massive on-line platform underneath the DSA earlier in 2024, which implies that the corporate is topic to the “most stringent guidelines” underneath the act in addition to being topic to sure obligations.

The retailer might be up for a penalty of as much as 6pc of its whole worldwide annual turnover if discovered non-compliant by the EU in its ultimate resolution.

“We store on-line as a result of we belief that merchandise offered in our single market are protected and adjust to our guidelines. In our preliminary view, Temu is much from assessing dangers for its customers on the requirements required by the Digital Providers Act,” mentioned Henna Virkkunen, the EU government vice-president for tech sovereignty, safety and democracy.

Earlier this 12 months, the Fee and the EU’s Shopper Safety Cooperation Community discovered that Shein breached the area’s shopper legal guidelines.

The patron safety watchdog mentioned that Shein employs quite a few practices that breach EU legal guidelines. These embrace offering false or misleading details about the sustainability features of a product, displaying incomplete and incorrect details about customers’ authorized rights to return bought merchandise and obtain refunds – and even failing to course of returns and refunds in step with these rights.

All of the whereas making it tough for customers to contact the e-retailer, the Fee present in its scathing report.

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