Time is urgent! EU requires Temu to provide compliance instructions as soon as possible

Recently, various EU organizations and institutions have taken frequent actions against Temu.

In mid-May , the European Consumer Organization ( BEUC) filed a complaint with the European Commission, demanding that Temu be included in the list of VLOPs (very large online platforms) as soon as possible. At the end of the month, the European Commission announced that Temu was officially recognized as a VLOP.

In mid-last month, zentrada.Europe, a large European online purchasing platform, launched a Europe-wide petition, claiming that platforms such as Temu have caused an influx of packages, causing heavy losses to Europe in terms of tax revenue and endangering local retail businesses.

Recently, the European Commission issued a "Requests for Information" notice (RFI) to Temu, requiring Temu to explain in detail to the European Commission how it will fulfill the obligations stipulated in various DSA (Digital Services Act) by July 12 (local time). If Temu does not respond to the RFI notice, it will face corresponding fines.

The RFI requires Temu to elaborate in its explanation on the measures it has taken to implement the “notice and action” mechanism, which allows users to report illegal goods to the platform; the RFI also requires Temu to provide relevant information on the design of its online interface to prevent it from deceiving and misleading users through methods such as “dark patterns”.

In addition, RFI also requires Temu to provide relevant information such as "adult protection", "transparency of recommendation system (algorithm used to display related products, etc.)", "trader traceability" and "design compliance".

According to the European Commission, this action was based on a previous complaint from BEUC. There is also speculation that the EU seems to want to use the information provided this time to assess Temu's safety in advance and to respond promptly to "consumer protection issues that have been widely raised." However, even if this information is provided, Temu needs to provide the first risk report on time by the end of September.

In response to the RFI, Temu said it is cooperating with the commission, “We would also like to reiterate our full commitment to complying with all applicable laws and regulations in the markets in which we operate.”

This RFI is crucial for Temu because the European Commission also mentioned that they will "evaluate the next steps (against Temu)" based on the information once it is available. This includes formally initiating legal proceedings against Temu if the Commission believes that Temu has committed any violations. If Temu is indeed found to have violated the DSA Act, the platform will face a fine of up to 6% of its global turnover.

Temu's emphasis on the European market is also obvious to all. In addition to the increase in Temu's marketing expenses in Europe, a recent Morgan Stanley research report also pointed out that Temu's GMV regional distribution is undergoing significant changes. Morgan Stanley analysts pointed out that the contribution of the US market to Temu's GMV will drop from more than 50% in 2023 to 33% in 2024, while the European market is expected to become its largest GMV source in 2024, accounting for 37%.

Temu

European Union

Compliance Statement