EU fines Temu $232 million for selling illegal products

Source: Engadget

Background

The European Commission has imposed a €200 million (US$232 million) fine on Temu for failing to prevent the sale of illegal products on its platform. The Commission stated that “there is a high risk for consumers in the EU to encounter illegal products on the platform,” citing violations of the Digital Services Act (DSA) involving items such as baby toys and small electronics. The details were outlined in an official press release.

Temu entered the European market in 2023, offering a wide range of low‑price goods from clothing to electronics. European regulators opened a probe shortly after its launch, accusing the company of selling illegal products.

Regulatory Action

• The fine targets deficiencies in Temu’s compliance measures.
• The Commission noted that “Temu’s risk assessment of October 2024 was inaccurate… and may therefore have led to inadequate mitigation measures against the dissemination of illegal products.”
• Regulators are also investigating specific products that do not meet EU safety standards.

France has called for stronger actions against China‑based online platforms after accusing both AliExpress and Shein of selling child‑like sex dolls, as reported in an Engadget article.

Temu’s Response

In a statement to the Financial Times, Temu said it disagreed with the EC’s decision and described the fine as “disproportionate.” The company added that it had taken additional steps to strengthen its governance and risk assessment, arguing that the decision “does not reflect the current state of our systems.”

Implications

• Temu is the second company penalized under the Digital Services Act, following a €120 million (US$140 million) fine on Elon Musk’s X platform.
• The company has until August 2026 to submit an action plan detailing how it will address illegal product sales in Europe. Failure to provide a satisfactory plan could result in additional fines of up to six percent of its annual global revenue.
• Starting in July, Temu’s European operations may also be affected by a new EU rule imposing a flat €3 fee on e‑commerce parcels valued under €150.