Business
Temu to be investigated by EU tech regulators over sale of illegal products
Global Banking & Finance Review®
Company
By Foo Yun Chee
BRUSSELS (Reuters) – Chinese online retailer Temu will be investigated on whether it may have breached EU tech rules against the sale of illegal products, EU tech regulators said on Tuesday, in a move which could lead to hefty fines for the company.
The EU investigation will also focus on the potentially addictive design of Temu’s service, including its game-like reward programmes, and its systems to recommend purchases to users.
The European Commission launched its probe under the Digital Services Act (DSA), which requires very large online platforms such as Temu to do more to tackle illegal and harmful content on their platforms, following complaints by pan-European consumers organisation BEUC and 17 of its national members.
Temu, which has 92 million users in the 27-country European Union, is a unit of Chinese ecommerce giant PDD Holdings.
The EU tech enforcer will also investigate whether Temu is complying with the DSA obligation to provide researchers access to its publicly accessible data.
“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,” EU antitrust and tech chief Margrethe Vestager said in a statement.
Temu could face a fine of as much as 6% of its global turnover if found guilty of breaching the DSA.
(Reporting by Foo Yun Chee)
The Digital Services Act (DSA) is a regulation by the European Union that aims to create a safer digital space by establishing rules for very large online platforms to tackle illegal and harmful content.
Consumer protection refers to laws and regulations designed to ensure the rights of consumers, promoting fair trade, competition, and accurate information in the marketplace.
Compliance in finance refers to the adherence to laws, regulations, and guidelines governing financial practices, ensuring that organizations operate within legal frameworks.
A regulatory framework is a system of rules and guidelines that govern the operations of businesses within a specific sector, ensuring compliance and protecting stakeholders.
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