Temu is the newest platform the European Fee (EC) has fastened its regulatory gaze upon. Europe’s prime shopper enforcement authority stated Thursday it’s opening a proper investigation into the net retailer for enabling the sale of unlawful merchandise, together with limiting the reappearance of beforehand suspended “rogue merchants” with a historical past of hawking prohibited items.
Along with the unlawful product allegation, the EC can also be investigating Temu’s doubtlessly addictive design, the platform’s programs that suggest merchandise and information entry for researchers. The alleged violations fall beneath the Digital Companies Act (DSA), which empowers the EC to levy fines of as much as six p.c of Temu’s annual income.
In a press release to Engadget, an organization spokesperson stated it plans to cooperate totally. “Temu takes its obligations beneath the DSA significantly, constantly investing to strengthen our compliance system and safeguard shopper pursuits on our platform,” the Temu spokesperson wrote. “We’ll cooperate totally with regulators to assist our shared aim of a secure, trusted market for shoppers.”
Temu added that it’s in discussions to affix the “Memorandum of Understanding (MoU) on the sale of counterfeit items on the web,” a collective of on-line retailers (facilitated by the EC) that collaborates to stop faux product gross sales in Europe. “We are able to verify that we’re in discussions to affix the initiative,” the Temu spokesperson instructed Engadget. “Counterfeiting is an industrywide problem, and we consider that collaborative efforts are important to advancing our shared objectives of defending shoppers and rights holders.”
The EC’s formal proceedings comply with a preliminary threat evaluation report Temu offered the EU on the finish of September, its replies to the Fee’s formal requests in June and October and data shared by third events. As Bloomberg notes, Meta, X, AliExpress and TikTok are additionally going through DSA investigations.
The US, which generally lags far behind the EU in reining in Large Tech, stated in September it might examine Temu, too. Leaders of The Shopper Product Security Fee (CPSC) ordered workers to judge considerations about “lethal child and toddler merchandise” on the platform.
Among the many EC’s considerations are whether or not Temu’s programs are designed to stop the reappearance of beforehand suspended merchants and non-compliant merchandise. It’s going to additionally have a look at the platform’s doubtlessly addictive gamified reward applications and its programs to mitigate the dangers from addictive design decisions that would hurt prospects’ psychological well-being. It’s going to examine Temu’s parameters used to suggest items (the Fee desires no less than one “simply accessible choice that’s not based mostly on profiling”) and whether or not the corporate complies with the DSA’s requirement to offer researchers with publicly accessible information.
The EC doesn’t set authorized deadline for finishing DSA investigations. As soon as concluded, the Fee will determine whether or not to deliver the hammer down, settle for voluntary commitments to treatment the issues or drop the case.