The European Commission has announced on Thursday the formal start of a disciplinary procedure against the online sales platform Temu for the alleged sale of illegal products and the potentially addictive design of its platform, as well as for doubts that its purchase recommendation systems and access to data by researchers comply with the requirements of the new EU legal framework for Digital Services (DSA).
The vice-president of the Community Executive in charge of Competition, the liberal Margrethe Vestager, has explained that Brussels acts to protect consumers and ensure compliance with the community legislation that applies to online platforms to guarantee a common market “safe and fair for all”.
Specifically, the Commission will examine the measures taken by the Chinese platform to control the reappearance of sellers who have been previously removed for dishonest practices and to limit the re-advertising of illegal or dangerous products that have been removed in the past.
Another key issue under scrutiny is whether the company complies with the requirement to publish the main parameters used in its recommendation systems and to provide users with at least one easily accessible option that is not based on profiling.
The opening of a file is the first formal step in a process that, if serious breaches are proven, can lead to fines of up to 6% of the provider’s total annual worldwide turnover and the obligation for the company to change its practices.
Community legislation provides for other measures such as imposing a period of reinforced supervision to ensure compliance with the corrective measures to which the firm commits.
Temu is an online market with an average of more than 45 million monthly users in the European Union, as reported to the community services, which is why it exceeds the threshold that the new community regulations establish to designate a company as a “very large platform” (VLOP).
The European Consumers’ Organisation (BEUC) has welcomed the investigation opened by Brussels in a statement, but has warned that this is only “a first step” and has hoped that the community services will “maintain pressure” on Temu to ensure that it complies with the law “as soon as possible”.
“Consumer groups have identified many problems with Temu, from the sale of many dangerous or illegal products to the frequent use of design techniques to deceive consumers,” described the spokesperson for Digital Policy at BEUC, Fernando Hortal Foronda.
