The European Union (EU) has launched a formal investigation into the Chinese e-commerce platform, Temualleging that it sells illegal products and is designed to create addiction among consumers.
“There is a real suspicion that not enough is being done (or effectively) to really prevent the spread of illegal products,” a European Commission official, who did not want to be quoted, told reporters Thursday morning. Potentially illegal products included pharmaceuticals, toys and cosmetics.
A app out of control
Although Temu frequently removes illegal products, they reappear again very quickly, another official said. “So we believe that some of the controls in place are not working correctly“.
Earlier this year, trade association Toy Industries of Europe published a report warning that none of the 19 toys it had purchased on Temu.eu complied with EU law. After sending them to a laboratory for testing, they said many of them posed significant risks to children. The group warned that a baby rattle included sharp edges, and that the chemicals in a Temu slime kit exceeded the legal limit for toys by 11 elements.
“Our action will ensure a level playing field and that all platforms, including Temu, fully respect the laws that keep our European market safe and fair for everyone,” Commissioner Margrethe Vestager, head of competition and digital policy, said in a statement.
Addictive design
Officials also said they were concerned about the addictive design and the Temu recommendation systemssince they have reward programs gamified and scroll infinite.
Concern over Temu’s addictive design echoes another recent EU investigation into a TikTok rewards program launched in France and Spain in April. TikTok Lite, a basic version of TikTok itself, offered to pay users several cents a day to watch videos. Following the announcement of the EU concern, TikTok’s parent company ByteDance removed the feature from the region.
Temu says:
A spokesperson for Temu told WIRED that the company is investing in its compliance system: “We will cooperate fully with regulators to support our common goal of a safe and trusted market for consumers.”
Temu was not launched on the European market until April 2024, and its rise has been meteoric. As of September, Temu had more than 90 million users in the EU, meaning it is subject to the strictest rules of the Digital Services Act. This law, which came into force last year, empowers regulators to fine companies up to 6% of their global turnover. In March, AliExpress became the first online marketplace to face an investigation under the Digital Services Act.
Temu can now provide data showing that the EU’s suspicions are unfounded or introduce changes to the platform to avoid fines. The investigation does not have to conclude within any specific period.
“This decision by the Commission is a promising step, but only the first,” said Fernando Hortal Foronda, head of digital policy at the European Consumer Organization (BEUC), in a statement on Thursday. “Now, it is important that the Commission keeps up the pressure on Temu and puts pressure on the company to comply with the law as soon as possible.”
Article originally published in WIRED. Adapted by Mauricio Serfatty Godoy.
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