The European Commission has imposed a fine of €200 million on Chinese online retailer Temu for failing to adequately address the risks linked to the sale of illegal products on its platform.
This is the second and largest fine the Commission has issued for breaching the Digital Services Act (DSA).
The European Commission opened an investigation into Temu in October 2024, examining how diligently the platform had identified and analysed the systemic risks associated with illegal products.
It has now been concluded that Temu's 2024 risk assessment fell short of the standards required under the DSA.
The Commission's findings were partly based on mystery shopping. Tests showed that a very high percentage of chargers selected during the exercise failed safety checks.
Many baby toys were also found to pose risks, either because they contained chemicals exceeding safety standards or because loose parts presented a choking hazard.
The investigation further found that Temu's risk assessment relied too heavily on general information about online shopping, rather than on specific evidence concerning its own platform, such as public reports and product tests.
The company also failed to properly examine how recommendation systems or influencers might amplify the risk of illegal products being sold.
"Temu's risk assessment underestimates concrete risks, lacks specificity, is not grounded in solid evidence, and is not comprehensive," said Henna Virkkunen, vice-president of the Commission, in a press release.
"It leaves regulators, users, and the public in the dark about the true scale of potential harm posed by illegal products sold on Temu."
The Commission regards the risk assessment as one of the core obligations for large online platforms and has given Temu until 28 August to submit an action plan outlining measures to strengthen it.
Failure to comply could result in periodic penalty payments. Under the DSA, fines can reach up to 6% of a company's global annual turnover.
The Commission also noted that separate investigations into other possible DSA breaches by Temu remain ongoing, covering the platform's potentially addictive design, its recommendation systems and researchers' access to data.
Fines are calculated based on the severity and duration of the infringement and the scale of the platform concerned.
Temu has grown rapidly in the EU, offering a wide range of clothing, toys, home accessories and other products at very low prices.
The platform currently reaches around 113 million consumers across the bloc. This is only the second time the Commission has levied a fine under the DSA, which has been in force since 2023.
Late last year, Elon Musk's social media platform X was fined 120 million euros for breaching transparency obligations.
