The EU fines Temu 200M euros for allowing the sale of illegal goods – National
Online retailer Temu is facing a 200 million euro (CAD $322 million) fine after a European Union investigation found the company failed to protect customers from illegal products, including dangerous toys and faulty electronics.
The EU fine follows the findings of an investigation opened in 2024. Initial results revealed that Temu was exposing consumers to highly dangerous products that did not meet the union’s consumer safety standards.
The final report was published on Thursday.
“Evidence available to the Commission shows that consumers in the EU may have come across illegal products in Temu,” said a report published on Thursday.
The investigation found that “a very high percentage” of electronic chargers failed standard safety tests, the commission said, adding that “a high percentage of tested children’s toys pose a moderate to severe safety risk” because they contain “chemicals that exceed legal limits or pose choking hazards.”
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Regulators are also examining the risks posed by Temu’s “addictive design,” including “game-like” rewards programs and the steps the company is taking to mitigate those risks, according to the original 2024 investigation announcement.
The trade group imposed the fine under the Digital Services Act (DSA), a comprehensive rulebook that requires online platforms to protect online users from harmful content or dangerous goods and carries the threat of hefty fines.
A person navigates the Temu website on a smartphone in Toronto on April 4, 2023. Temu is accused of violating users’ privacy rights in a series of proposed class action lawsuits.
THE CANADIAN PRESS/Giordano Ciampini
Temu told Global News in an emailed statement that he “disagrees” with the commission’s findings and said the fine is “disproportionate.”
“The decision is related to our first DSA assessment in 2024 and does not reflect the current state of our plans,” the company said, adding that it “cooperates well with the Commission throughout this process and has taken other steps to strengthen risk assessment, platform governance, and user protection.”
“We will continue to engage with regulators in good faith and work toward a marketplace that serves consumers, businesses, and communities responsibly. We are reviewing the decision carefully and considering all available options,” the statement concluded.
Temu is the second digital platform to be fined under the DSA rules.
The Brussels-based commission fined Elon Musk’s X 120 million euros (CAD $193 million) under a similar act last year for repeated violations. It was the first time a fine had been issued under the DSA rules, which came into force in November 2022.
The Chinese company entered Western markets only three years ago and will be launched in Canada in 2023. Cheap goods – from clothes to household products – sent to Chinese merchants led to its significant growth in popularity.
Temu has faced scrutiny in America, where a congressional report last year accused the company of failing to prevent forced-made goods from being sold on the platform.
There is currently no official investigation of Temu’s practices by legal regulatory agencies in Canada, although there is a class-action lawsuit across the country against the online shopping platform for collecting data on its users that is excessive and in larger amounts than it discloses, according to the Consumer Law Group.
— via files from The Associated Press
