Chinese online retailer Temu hit with $232 million fine over illegal products
The 27-nation EU's fine follows preliminary findings last year that Temu was exposing consumers to a high risk of products sold on its platform
Temu was hit with a 200 million euro ($232 million) fine after an investigation by European Union regulators found the Chinese online retailer didn't do enough to protect consumers from illegal products.
The 27-nation EU's fine follows preliminary findings last year that Temu was exposing consumers to a high risk of products sold on its platform like baby toys and small electronics that didn't comply with EU consumer safety rules.
The bloc's executive arm issued the penalty under the Digital Services Act, or DSA, a wide-ranging rulebook that requires online platforms to do more to keep internet users safe from harmful content or dodgy goods, under the threat of hefty fines.
Temu did not respond immediately to a request for comment. The company is popular because it offers cheap goods - from clothing to home products - shipped from sellers in China. The platform has 92 million users in the EU and is owned by PDD Holdings Inc., which also owns the popular Chinese ecommerce site Pinduoduo.
The European Commission said Temu failed to identify, analyze and assess the systemic risks of illegal goods for sale on the platform and the resulting harm to European consumers.
The commission said failing to do proper risk assessments is a particularly serious breach of the bloc's digital rules.
Risk assessments are "not box‐ticking exercises," European Commission Executive Vice-President Henna Virkunnen said.
"Temu’s risk assessment underestimates concrete risks, lacks specificity, is not grounded in solid evidence, and is not comprehensive,” she said in a prepared statement. "It leaves regulators, users, and the public in the dark about the true scale of potential harm posed by illegal products sold on Temu. Now it is time for Temu to comply with the law.”
Temu has until the end of August to submit an "action plan” to remedy the problem. It could be hit with additional daily, weekly or monthly fines if it fails to comply.