EU opens probe into Chinese e-commerce platform Temu

The European Commission opened a formal investigation Thursday into the Chinese e-commerce platform Temu over potential breaches of the Digital Services Act, the bloc’s rulebook aimed at limiting the spread of illegal and harmful content online.

A preliminary analysis found that Temu may fail to crack down on noncompliant products and address risks linked to its platform's addictive design, such as reward programs, while falling short of transparency obligations.

The Commission earlier this month ordered the Chinese company to provide more information to show how it respects European Union rules — amid mounting pressure from the bloc's governments and consumer protection organizations arguing the platform was unsafe for consumers.

"There is a suspicion that not enough is done, not in an effective way to really prevent the dissemination of illegal products," a Commission official said, briefing reporters ahead of the announcement. "We have reasons to believe that Temu didn't properly analyze the addictive nature" of some of its features, they added.

Under the DSA, firms can face fines of up to 6 percent of their annual global revenue if the in-depth investigation, which is not bound by any timeline, confirms major infringements.

Temu, with 92 million monthly users in the EU, was designated as a very large online platform (VLOP) in May, forcing it to comply with more stringent rules and face direct scrutiny from the Commission.

In a statement, a spokesperson for Temu said that the company "takes its obligations under the DSA seriously, continuously investing to strengthen our compliance system and safeguard consumer interests on our platform" and "will cooperate fully with regulators."

Booming online marketplaces based in China — such as Temu, fast-fashion brand Shein and giant retailer AliExpress — have increasingly landed in policymakers' and regulators' crosshairs over concerns about dumping practices, forced labor and environmental pollution.

In her political guidelines, Commission President Ursula von der Leyen pledged to tackle "challenges with e-commerce platforms to ensure consumers and businesses benefit from a level playing field based on effective customs, tax and safety controls and sustainability standards."