The European Union, EU, fined Chinese-owned online retailer Temu €200 million, $232 million, on Thursday for allowing the sale of illegal products, including dangerous baby toys and defective chargers.
According to EU regulators, European consumers are “very likely to encounter illegal items” on Temu and the company “seriously underestimated how often EU consumers are likely to” see such products.
“The company failed to diligently identify, analyse, and assess the systemic risks of illegal products being offered on its platform and the resulting harm to consumers in the European Union,” the EU said.
Temu said it disagreed with the EU and that the fine was “disproportionate”.
The platform is extremely popular in the European Union, with 130 million users after entering the bloc’s market in 2023.
But it has come under fierce scrutiny since October 2024 when the EU opened its investigation, which preliminarily found in July last year that Temu had breached landmark rules over the risks of illegal products.
“Temu is a very big player in the European market,” EU tech commissioner Henna Virkkunen told reporters, adding that its size meant many EU consumers would be able to get illegal products.
Thursday’s fine is only the second imposed under the EU’s powerful Digital Services Act, DSA, on content, after Elon Musk’s X platform received a 120-million-euro fine in December.
Under the DSA, the world’s most popular digital platforms including social media apps and online retailers must conduct a risk assessment to understand what dangers they pose and how to tackle the risks.
The EU slammed Temu for its 2024 risk assessment that it said, “falls short of the standards”, citing the discovery of baby toys, such as rattles, containing chemicals that exceeded legal safety limits, and chargers that failed basic safety tests. It also pointed to jewellery.
The European Commission said Temu failed to properly assess the platform’s design and how it “could amplify dissemination risks of illegal products”.
