LONDON (AP) — The European Union has imposed a fine of 200 million euros (approximately $232 million) on the Chinese online retailer Temu due to its failure to safeguard consumers from illegal products, including hazardous toys and unsafe electronics.
This penalty follows an EU investigation that revealed Temu’s non-compliance with consumer safety regulations, exposing users to significant risks associated with products sold on its platform.
The fine was issued under the Digital Services Act (DSA), a comprehensive regulation aimed at ensuring online platforms prioritize user safety by managing harmful content and defective goods effectively. This marks the second instance of the EU enforcing a penalty under the DSA, following a previous $120 million fine levied against Elon Musk’s social media platform, X.
In response to the ruling, Temu expressed its disagreement with the decision, labeling the fine as ‘disproportionate.’ The company emphasized that the findings do not accurately reflect the current status of its systems, stating that it has actively engaged with the European Commission throughout the evaluation process.
Temu also noted that it has implemented additional measures to enhance risk assessment, platform governance, and user protection since the investigation.
The European Commission highlighted that Temu did not adequately identify or evaluate the systemic risks associated with illegal goods available on its platform, which posed significant threats to consumers. A mystery shopping exercise conducted by investigators revealed a concerning number of non-compliant products, particularly electronic device chargers and baby toys that failed safety standards.
Henna Virkunnen, Executive Vice-President of the European Commission, remarked that Temu’s risk assessments lacked thoroughness and specificity, failing to convey the potential dangers of the illegal products sold on its platform. She emphasized the necessity for Temu to adhere to the law moving forward.
Temu has until the end of August to submit an action plan to address the identified issues, with the possibility of facing further fines for non-compliance.