European Union officials have imposed a hefty 200 million euro ($232 million) penalty on the Chinese e-commerce platform Temu following an investigation that revealed the company failed to safeguard shoppers from dangerous merchandise including harmful toys and risky electronic devices.
The punishment from the 27-country European Union comes after initial research last year showed Temu was putting customers at significant risk by allowing items such as infant toys and small electronic gadgets that violated EU safety standards to be sold through its marketplace.
Officials issued the financial penalty using authority granted under the Digital Services Act, a comprehensive set of regulations that mandates online marketplaces take greater responsibility for protecting users from dangerous content and questionable merchandise, with substantial fines as enforcement.
In response, Temu stated it disagreed with the ruling and viewed the penalty as “disproportionate.”
“The decision relates to the commission’s first DSA evaluation of Temu in 2024 and does not reflect the current state of our systems,” the company said.
“Temu engaged constructively with the Commission throughout the process and has since taken further steps to strengthen risk assessment, platform governance, and user protection,” it said in a statement.
The marketplace has gained popularity by offering inexpensive merchandise ranging from apparel to household items delivered from Chinese vendors. The service has attracted 92 million European users and operates under PDD Holdings Inc., the same company that runs the well-known Chinese shopping website Pinduoduo.
European Commission officials determined that Temu failed to properly identify, examine and evaluate the systematic dangers posed by prohibited merchandise available through its platform and the potential damage to European customers.
Regulators conducted a “mystery shopping exercise” that discovered numerous “non-compliant” items, including multiple electronic device chargers that couldn’t pass fundamental safety evaluations. They also discovered an extremely high proportion of infant toys that created safety hazards, either due to chemical content exceeding permitted levels or detachable components that could create choking dangers.
The commission emphasized that inadequate risk evaluation represents an especially severe violation of the region’s digital regulations.
“Risk assessments are not box‐ticking exercises,” European Commission Executive Vice-President Henna Virkunnen said.
“Temu’s risk assessment underestimates concrete risks, lacks specificity, is not grounded in solid evidence, and is not comprehensive,” she said in a prepared statement. “It leaves regulators, users, and the public in the dark about the true scale of potential harm posed by illegal products sold on Temu. Now it is time for Temu to comply with the law.”
Temu must provide an “action plan” to address the issues by the end of August. The company could face additional ongoing penalties if it doesn’t meet compliance requirements.
