Temu continues to face scrutiny over its compliance with regulatory issues.
The European Consumer Organization (BEUC) has brought a complaint against Temu to the European Commission and the Digital Services coordinator, alleging that the e-commerce platform has violated the EU Digital Services Act (DSA).
It brings a variety of allegations about Temu’s business practices to the fore, claiming that the company breaks the DSA by offering incomplete information about sellers’ identification information; leaving necessary information off of products; making it difficult for users to opt out of recommender systems using their personal data; manipulating customers into paying more for goods than advertised; failing to protect minors; keeping ambiguous terms and conditions and shirking its duty to provide information on out-of-court settlements.
The complaint maintains that, in combination, these purported issues warrant the launch of “a joint investigation with participation of the concerned Digital Services Coordinators concerned by Temu’s practices.”
Should that requested investigation yield negative results, the BEUC has asked that the coordinators impose fines and penalties on Temu.
A spokesperson for Temu said it will “take [the complaint] very seriously and will study it thoroughly” in an effort to “improve Temu’s service for consumers,” noting that it remains committed to compliance and transparency where necessitated by law or regulations.
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“We are eager to work together to enhance our service and to rectify any shortcomings. We hold the interest of consumers at heart and strive to provide a safe and trusted service that is valued by consumers and adds significant value,” the spokesperson said.
The complaint also alleges that the company should receive a new designation as a Very Large Online Provider (VLOP) under the DSA. Companies that have over 45 million monthly active users in the EU—like Amazon, TikTok and, most recently, Shein—already have that status. In April, Temu said it has over 75 million MAUs in the EU, well above the threshold for a VLOP.
If designated that way, Temu would face an increased number of regulations around transparency, protection of minors, product quality and more. Once a company becomes a VLOP, it has four months to make any necessary upgrades to its infrastructure, data practices, user experience and more before it begins reporting.
The BEUC has concerns that Temu won’t be able to keep up with the demands of being a VLOP, if designated.
“Since Temu already fails to comply with fundamental DSA obligations as an online platform, we have serious doubts that Temu will be in a position to comply with the new requirements as a VLOP within four months of its designation.”
Specifically, it said, Temu’s measures for protecting minors, principles around consumer protection and processes for opting out of profile-based recommender systems lead the organization to believe Temu’s actions would be unfit for the expectations imposed by stricter regulation.
Monique Goyens, director general at the BEUC, said Temu’s lackadaisical attitude could come back to bite it.
“Temu is being complacent here because it is breaching the EU’s Digital Services Act, which is major new legislation designed to keep consumers safe online. Products sold on marketplaces, whether online or offline, whether they are European, American or Chinese, must be safe and comply with European law if they sell to European consumers,” Goyens said in a statement.
A Temu spokesperson told Sourcing Journal the company continues to monitor the feedback it receives from regulatory agencies and other stakeholder organizations. The company also noted it signed a product safety pledge with South Korea’s FTC on Monday and that it has entered a cease and desist with Germany’s Federation of Consumer Organizations, “committing to addressing concerns raised about our practices, many of which are covered by the BEUC’s complaint.”
“We have been actively adjusting our service to align with local practices and preferences, and we are committed to full compliance with the laws and regulations of the markets where we operate,” the spokesperson said. “We aim not just to meet the minimum legal requirements but to exceed them by adhering to the highest standards of best practices.”
