Consumer protection groups across the European Union have lodged coordinated complaints against Temu, accusing the Chinese-owned e-commerce platform of multiple breaches of the bloc’s Digital Services Act (DSA). The groups have accused Temu of failing to meet various DSA requirements, including trader traceability, rules against manipulative design, and transparency around product recommender algorithms.
Consumer protection organization BEUC, which represents 45 regional groups across 31 EU countries, has filed a complaint against Temu with the European Commission, calling for the platform to be designated as a “very large online platform” (VLOP) under the DSA. If classified as a VLOP, Temu would have to comply with additional rules on algorithmic transparency and accountability, including mitigating systemic risk.
Furthermore, 17 of BEUC’s member organizations have filed DSA complaints with their national consumer protection authorities, accusing Temu of breaking the regulation’s general rules. The coordinated complaints focus on various issues, including the lack of trader traceability, manipulative techniques used by the platform to encourage more spending, and insufficient information about traders, leaving consumers unsure about the origins and safety of products.
The consumer protection groups are particularly concerned about the safety risks associated with Temu’s platform. They argue that the steep price discounts and gamification features on the platform are likely to attract children, putting their privacy, safety, and security at risk. The groups emphasize that Temu fails to provide a safe, predictable, and trustworthy online environment as required by the DSA. They also warn about the high number of dangerous products sold on the platform by untraceable traders and the opaque functioning of the recommender systems.
These coordinated complaints follow individual actions taken by consumer groups in relation to the safety and legality of products sold on Temu’s marketplace. For instance, an Italian consumer group, Altroconsumo, conducted a test on cosmetics purchased from the platform and found that the majority of products did not provide a complete list of ingredients. Similarly, a German consumer organization, vzbv, raised concerns about misleading product reviews and price discounts displayed on the platform.
At present, Temu is not designated as a VLOP, which means its compliance with the DSA’s general rules falls under the oversight of Digital Services Coordinators in EU member states where it operates. However, the complaints are likely to increase pressure on the EU to designate Temu as a VLOP. The European Commission has acknowledged that Temu recently reported more than 45 million monthly active users in the EU, which is the threshold for triggering VLOP status. The Commission is currently in contact with Temu regarding a possible designation in the future.
Last month, Shein, another Chinese e-commerce giant and a rival to Temu, was designated as a DSA VLOP by the EU after reporting over 45 million monthly active users. In March, the EU launched its first DSA investigation on a marketplace, targeting another Chinese-owned platform, AliExpress, which was named a VLOP in April 2021. The ongoing investigation focuses on potential breaches of DSA rules related to risk management, content moderation, transparency, trader traceability, and data access for researchers.
The complaints against Temu highlight the growing scrutiny faced by Chinese-owned e-commerce platforms operating in the EU. The EU has made consumer protection and the regulation of online marketplaces a priority, and it will likely continue to investigate and take action against platforms that do not meet the required standards. As the digital economy continues to expand, ensuring the safety and rights of consumers becomes increasingly crucial, and the EU is actively working towards achieving this goal.
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