EU Commission Launches Investigation into Temu’s Compliance with Digital Services Act

The European Commission has initiated formal proceedings to determine if Temu, a very large online platform, has violated the Digital Services Act (DSA) in several critical areas. These include the sale of illegal products, potentially addictive design features of the service, the recommendation systems used for product suggestions, and data accessibility for researchers.

This decision follows preliminary reviews of a risk assessment report submitted by Temu at the end of September 2024, as well as responses to the Commission’s information requests made on June 28 and October 11, 2024. The Commission also considered input from third parties and insights gathered through cooperation with national authorities, particularly the Irish Digital Services Coordinator.

The investigation will focus on the following key areas:

1. Sale of Non-Compliant Products: The Commission will assess Temu’s measures to prevent the sale of illegal products within the EU. This includes evaluating systems designed to restrict the re-entry of previously suspended sellers and non-compliant goods.
2. Addictive Design Features: The inquiry will examine the risks associated with the service’s design, particularly features that may promote addictive behaviors, such as reward programs. It will evaluate what steps Temu has taken to mitigate these risks, which could negatively impact users’ mental and physical well-being.
3. Content Recommendation Compliance: The investigation will also review Temu’s adherence to DSA requirements regarding how it recommends products and content to users, including transparency about the parameters of its recommendation systems.
4. Data Access for Researchers: The Commission will assess Temu’s compliance with obligations to grant researchers access to publicly available data.

Should the Commission find sufficient evidence of wrongdoing, Temu could face penalties for infringing several articles of the DSA. The Commission will conduct an in-depth investigation as a priority, though the opening of these proceedings does not indicate a predetermined outcome.

Next Steps

Following the formal proceedings’ initiation, the Commission will continue to collect evidence. This may involve sending further information requests to Temu or third parties, as well as conducting interviews or monitoring actions. The opening of proceedings allows the Commission to implement additional enforcement measures, which could include a non-compliance decision or accepting commitments from Temu to address identified issues.

The DSA does not impose a specific timeline for the conclusion of these proceedings, and the duration of the investigation will depend on various factors, such as the complexity of the case and the level of cooperation from the company.

Additionally, these proceedings do not preclude potential actions by Consumer Protection Cooperation Network or market surveillance bodies regarding Temu’s compliance with EU consumer laws and product safety regulations.

Background

Temu was classified as a Very Large Online Platform (VLOP) on May 31, 2024, following its report of over 45 million monthly active users in the EU. Since its designation, Temu has been subject to stringent obligations under the DSA, including assessing and mitigating systemic risks associated with its services. As of September 2024, Temu reported 92 million monthly users.