The European Union fined Chinese online retailer Temu €200 million on Thursday after regulators found the platform failed to stop the sale of illegal and dangerous products to consumers across Europe.
The penalty marks the largest fine issued so far under the EU’s Digital Services Act, which requires major online platforms to assess risks linked to their services and take steps to limit harm to users.
European Commission officials said Temu failed to properly identify and address the risks tied to products sold through its marketplace.
According to the Commission, European consumers were “highly likely” to encounter illegal products while using the platform.
Officials said the site offered items that breached EU safety standards, including unsafe chargers and toys linked to choking risks or chemical rule violations.
EU digital commissioner Henna Virkkunen said the case centred on one of the core obligations of the bloc’s digital rules.
“This is about risk management. It is very much a cornerstone of our DSA,” Virkkunen told reporters in Brussels.
“With this decision we are sending a very strong message to Temu.”
The Commission ordered Temu to submit a revised risk assessment and action plan by 28 August. Regulators will then decide whether the company has done enough to comply with EU law.
Further penalties remain possible, as the European Commission is still examining whether Temu uses addictive platform design features and whether its recommendation systems and influencer promotion programmes increase the spread of illegal products.
Temu said it disagreed with the decision and described the fine as disproportionate.
In a statement, the company said the ruling reflected its “first DSA assessment in 2024” and did not represent the current state of its systems.
The probe began almost two years ago after complaints from the European consumer organisation BEUC and several national consumer groups.
Temu has grown rapidly in Europe since launching in the EU market in 2023. Officials estimate the platform now has around 130 million users across the bloc.
The €200 million penalty equals around 0.4 percent of the global turnover reported last year by Temu’s parent company PDD Holdings.
Under the Digital Services Act, companies can face fines of up to six percent of global annual revenue for serious breaches.
The decision marks only the second major financial penalty issued under the law. Last December, the EU fined Elon Musk’s platform X €120 million over separate violations linked to digital content rules.
Temu still has the right to appeal the decision.
HT