Temu is scheduled to present at a meeting on 11 November as a “potential new signatory”. Credit: Markus Mainka / Shutterstock.

Chinese online retailer Temu is facing an investigation launched by the European Commission (EC) over possible violations of the Digital Services Act (DSA) concerning the sale of illegal products.

This decision comes after a review of Temu’s risk assessment report submitted at the end of September 2024, along with responses to the commission’s requests for information made on 28 June and 11 October, and input from third parties.

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The formal proceedings will examine several key areas including the systems Temu employs to prevent the sale of non-compliant products in the European Union (EU), the potential risks associated with its service design, its compliance with DSA requirements related to content recommendations and meeting DSA obligations regarding access to publicly available data for research purposes.

If the EC’s concerns are substantiated, Temu could be held liable under the DSA for violating specific articles.

The commission will proceed with a detailed investigation, which is a priority, but the initiation of these proceedings does not indicate the final outcome.

EC for a Europe Fit for the Digital Age executive vice-president Margrethe Vestager said: “We want to ensure that Temu is complying with the Digital Services Act. Particularly in ensuring that products sold on their platform meet EU standards and do not harm consumers. Our enforcement will guarantee a level playing field and that every platform, including Temu, fully respects the laws that keep our European market safe and fair for all.”

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Temu was designated as a Very Large Online Platform (VLOP) on 31 May 2024, under the EU’s Digital Services Act, after reporting more than 45 million monthly active users in the EU.

Following this designation, Temu was required to meet stringent obligations under the DSA, including assessing and mitigating systemic risks. As of September 2024, Temu reported 92 million monthly users.

Meanwhile, Temu is contemplating joining an anti-counterfeit group in Europe to combat the sale of fake products online, a meeting agenda seen by Reuters said. 

The group signed a voluntary anti-counterfeits memorandum of understanding (MOU), facilitated by the EC.

It includes e-commerce giants such as Amazon, Alibaba, and eBay, as well as major brands that include Adidas, Nike, Hermes, and Moncler.

Temu is scheduled to present at a meeting on 11 November as a “potential new signatory”, according to an agenda note.

In June, the US state of Arkansas initiated legal action against Temu for alleged violations of the state’s consumer privacy laws.