LONDON (AP) — The European Union imposed a fine of 200 million euros (approximately $232 million) on Temu, a Chinese online retailer, on Thursday. This penalty follows an investigation that revealed Temu’s failure to protect consumers from hazardous products, including toxic toys and unsafe electronics.
The investigation by the EU’s executive arm concluded that Temu had exposed consumers to significant risks through products sold on its platform that did not meet EU safety regulations. The findings stemmed from preliminary assessments conducted last year.
The fine was issued under the Digital Services Act (DSA), a comprehensive regulation aimed at ensuring online platforms enhance user safety by mitigating harmful content and defective goods. The DSA imposes stringent requirements on companies like Temu to conduct thorough risk assessments and compliance checks.
In response to the fine, Temu expressed disagreement, labeling the penalty as “disproportionate.” The company asserted that the decision does not accurately reflect its current safety measures and improvements.
“Temu engaged constructively with the Commission throughout the process and has since taken further steps to strengthen risk assessment, platform governance, and user protection,” the company stated.
The European Commission found that Temu had not adequately identified or assessed the systemic risks associated with illegal goods available on its platform. This negligence posed potential harm to European consumers.
Investigators conducted a “mystery shopping exercise” that revealed numerous non-compliant products, including electronic device chargers that failed safety standards and baby toys that posed suffocation risks due to hazardous materials or detachable parts.
The Commission highlighted that failing to perform proper risk assessments constitutes a serious breach of the bloc’s digital regulations. European Commission Executive Vice-President Henna Virkunnen emphasized that risk assessments must be comprehensive and evidence-based.
“Temu’s risk assessment underestimates concrete risks and lacks specificity, leaving regulators and users unaware of the potential harm posed by illegal products,” she stated. The company is required to submit an action plan by the end of August to address these issues, with the possibility of incurring additional fines for non-compliance.