The European Commission has determined that Temu is potentially violating the Digital Services Act (DSA) by failing to adequately assess the risks of illicit products being sold on its platform. This conclusion comes after a thorough investigation initiated on October 31, 2024.

Preliminary findings indicate a significant risk for EU consumers encountering illegal products, including non-compliant baby toys and small electronic devices. The Commission criticized Temu for relying on general industry information rather than specific data related to its own market, which may have led to insufficient measures to mitigate the spread of these illicit products.

Temu now has the opportunity to defend itself by reviewing the investigation file and responding in writing to the Commission's findings. If the preliminary opinion is upheld, the Commission could issue an infringement decision against Temu, which may face fines of up to 6% of its total global annual revenue.

Additionally, the Commission is continuing its investigation into the effectiveness of Temu's mitigation measures, the use of addictive design features, the transparency of recommendation systems, and access to data for researchers. The competition authority will also participate in consultations as the Digital Services Coordinator within the European Digital Services Committee.

The Digital Services Act aims to create a safer and more responsible online environment, imposing specific obligations on online intermediary services, particularly for very large platforms that reach over 10% of the 450 million consumers in Europe.