Consumer protection groups around the EU have filed coordinated complaints against Temu, accusing the Chinese-owned ultra low-cost e-commerce platform of violations related to the bloc’s Digital Services Act (DSA). Temu was launched in the region just over a year ago recently reported Surpassed 75 million monthly users.
Fines for confirmed breaches of the EU’s online governance and market protection regime could reach up to 6% of the platform’s parent company’s global annual turnover. For some context, Teemu’s parents are Pinduoduo. informed of Revenues of nearly $35 billion for 2023, nearly double that of last year; Temu was estimated This is about 23% of last year’s amount.
European consumer organization BEUC, which represents 45 regional consumer protection groups in 31 EU countries, said on Thursday it has filed a complaint against Teemu with the European Commission – prompting the EU to immediately call it a “very large online platform”. (VLOP). Under DSA. (VLOP-status would mean that Temu would have to comply with additional algorithmic transparency and accountability rules, including reducing systemic risk. Other e-commerce VLOPs include Alibaba, Amazon, Booking.com, Google Shopping and Zalando.)
Additionally, 17 BEUC member organizations around the block have filed DSA complaints with their national consumer protection authorities – accusing Temu of breaching the rules. General rules of regulation that have come into force on TEMU since mid-February,
The coordinated complaints allege that the e-commerce giant is failing to meet DSA requirements, including merchant traceability requirements; Rules against manipulative design; and transparency around product recommender algorithms.
Commenting in a statement, BEUC Director General Monique Goyens accused the marketplace of being “full of manipulative techniques” designed to induce consumers to spend more, and of insufficient information about traders. Claimed to “quit often”[es] “Consumers have no idea who they are buying the product from.”
“The lack of traceability prevents consumers from making informed decisions or knowing whether a product complies with EU safety regulations,” he said.
Consumer protection groups are also raising concerns about modest safety, pointing out that the excessive price discounts and gamification features included in Teemu’s platform may be attractive to children.
“Temu does not guarantee its users a secure, predictable, and reliable online environment as required by law,” they argue in the complaint. “Among other things, we are deeply concerned that consumers are falling victim to manipulative techniques, that Teemu fails to ensure the traceability of merchants operating on its platform, or that its overall practices remains opaque, all of which violate the Digital Services Act. ,
The group also warns, “Ultimately, the high number of dangerous products sold on Temu by untraceable merchants through manipulative practices and opaque recommendation systems are ingredients of a toxic cocktail that impairs the privacy, safety, and security of minors.” Can.”
The coordinated complaints follow some individual actions by consumer groups concerned about the safety and legality of products for sale on Temu’s marketplace.
For example, last fall, Italian consumer group Altroconsumo tested cosmetics purchased on the platform and found that the majority failed to list (or list altogether) the ingredients. Earlier this year, German consumer organization vzbv raised concerns about misleading product reviews and price discounts displayed on the platform.
As Temu is not currently a designated VLOP, its monitoring with the general rules of the DSA falls to the competent digital service coordinators in the EU Member States where its service operates. Ireland’s media watchdog, Coimissiún na Máin, is in frame as Teemu Opened an office in Dublin a year ago,
However the complaint is likely to increase pressure on the EU to designate Temu as a VLOP. A spokesperson for the commission told us it has information about Temu recent reporting More than 45 million monthly active users in the EU – which is the threshold to trigger VLOP status – adding: “We are in contact with the platform with a view to a possible designation in the future.”
Teemu has been contacted for comment.
last month Shein, another Chinese e-commerce giant Locked in fierce rivalry with Temu – Regarding international market expansion – was designated as a DSA VLOP by the EU after reports of exceeding the 45M MAU limit.
Whereas, back in marchThe EU launched its first DSA investigation into the market, targeting another Chinese-owned ecommerce platform – Alibaba’s AliExpress – which was named VLOP in the first wave of designations. April last year,
The Commission then said that it suspected AliExpress of violating DSA rules in areas related to the management and mitigation of risks; Content moderation and its internal complaint management mechanism; Transparency of advertising and recommendation systems; Ability to trace traders; and data access for researchers. Investigation – one of several that have since opened into VLOP Previous Year’s Compliance Deadline The rollout for these larger platforms is ongoing.
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