initial details

The European Commission (EC), the main consumer protection body in the region, said it had launched a formal investigation into an online store that sold illegal products and allowed sellers who had previously been kicked out of the market to return, 24 Channel reported. Link to the European Commission’s website.

In addition to allegations of trafficking in illegal goods, the EC is also investigating Temu’s design, which could be addictive, forcing users to scroll more and more, and other questionable aspects of the app. The alleged breaches fall under the EC’s Digital Services Act (DSA), which allows for criminal sanctions Fine of up to six percent of annual income.

A Temu representative said the company plans to cooperate fully:

Temu takes its obligations under the DSA seriously and is constantly investing to strengthen our compliance system and protect the interests of consumers on our platform. We will fully cooperate with regulatory authorities to support our common goal of creating a safe and secure marketplace for consumers.
– wrote the representative.

The Chinese company added that it is currently considering joining the “Memorandum of Understanding on the Sale of Counterfeit Goods on the Internet”, an association of online retailers (facilitated by the EC) working together to prevent the sale of counterfeit goods in Europe.

The EC’s formal review follows Temu’s preliminary risk assessment report submitted to the EU at the end of September, its responses to the Commission’s formal inquiries in June and October, and information provided by third parties.

It is worth noting that there is already talk in the US that Temu should be investigated and regulated. The Consumer Product Safety Commission (CPSC) in September instructed staff to evaluate concerns about “lethal products for children and toddlers” found on the platform. These products contained hazardous substances that are harmful to health.

What specifically will be investigated?

Topics of interest to the European Commission include:

• Temu’s systems are designed to prevent the reemergence of previously blocked sellers and illegal products.
• Reward programs provided through games and tests that are addictive and harmful to customers’ mental health.
• Temu parameters used to recommend products. The commission wants “at least one off-the-shelf option that does not rely on profiling” customers.
• Does the company comply with DSA’s obligation to provide publicly available data to researchers?
• Is the app intentionally designed to make viewing products addictive?

The EC did not set a deadline for the completion of the investigation. Upon completion of the investigation, the Commission will decide whether to ban the service or accept voluntary commitments to eliminate the problems.