The European Union has initiated a formal inquiry into the operations of Temu, a major online marketplace.
- Concerns focus on the sale of illegal goods and potential breaches of the Digital Services Act by Temu.
- Issues have been raised regarding Temu’s system’s ability to prevent previously banned traders from resuming sales.
- The platform’s use of aggressive sales tactics with an addictive design also faces scrutiny.
- Complaints involve inadequate seller information provided to consumers, filed by a consumer group.
The European Union has officially launched an investigation into Temu, one of the leading global online marketplaces, amid fears it has not been adequately preventing the sale of illegal goods. The investigation is spearheaded by the European Commission, which is assessing whether Temu is in violation of the recently enacted Digital Services Act (DSA).
One of the primary concerns revolves around the effectiveness of Temu’s mechanisms to prevent ‘previously suspended rogue traders’ from quickly reappearing. Reports suggest that such vendors have managed to return to the platform and resume their activities soon after being banned, potentially offering illegal products once more.
Moreover, the platform’s sales strategies are under scrutiny. The European Commission has highlighted methods such as ‘addictive designs’ and ‘game-like rewards’ as elements that exacerbate consumer risks, suggesting that Temu uses aggressive sales techniques that might not align with the principles of fair consumer practices.
Margrethe Vestager, the European Commission’s Executive Vice-President, stated, “We want to ensure that Temu is complying with the DSA. Particularly in ensuring that products sold on their platform meet EU standards and do not harm consumers.” This initiative underscores the EU’s commitment to maintaining a market environment that is safe and equitable for all participants.
Additionally, a pan-European consumer group has accused Temu of violating DSA terms by failing to provide shoppers with essential information concerning the identities and details of the sellers on its platform. This complaint, lodged in May, has garnered support from 17 EU members who have also filed grievances with their respective national authorities.
In response to these allegations, a spokesperson from Temu clarified that the investigation is currently based on suspicions, emphasizing that no definitive conclusions have been drawn at this preliminary stage. The spokesperson further noted that the investigation aims to identify if there is a systemic issue at play within the platform.
The EU’s investigation into Temu signifies a pivotal moment in regulating digital marketplaces, ensuring compliance with established standards.
