Client safety teams across the European Union have filed coordinated complaints towards Temu, accusing the Chinese language-owned extremely low-cost e-commerce platform of a raft of breaches associated to the bloc’s Digital Companies Act (DSA). Temu solely launched within the area a couple of yr in the past however lately reported blasting previous 75 million month-to-month customers.
Penalties for confirmed breaches of the EU’s on-line governance and market security regime can attain as much as 6% of the worldwide annual turnover of the platform’s dad or mum. For some reference, Temu’s dad or mum Pinduoduo reported revenues of practically $35 billion for 2023, practically double on the yr prior; Temu was estimated to account for about 23% of that quantity final yr.
BEUC, the European shopper group that represents 45 regional shopper safety teams throughout 31 EU international locations, stated Thursday it’s filed a grievance towards Temu with the European Fee — calling for the EU to urgently designate it as a “very giant on-line platform” (VLOP) beneath the DSA. (VLOP-status would imply Temu has to adjust to further algorithmic transparency and accountability guidelines, together with mitigating systemic danger. Different e-commerce VLOPs embrace Alibaba, Amazon, Reserving.com, Google Buying and Zalando.)
On the similar time, 17 of BEUC’s member organizations across the bloc have filed DSA complaints with their nationwide shopper safety authorities — accusing Temu of breaching the regulation’s common guidelines which have utilized to Temu since mid-February.
The coordinated complaints allege the e-commerce big is failing to satisfy a raft of DSA necessities, together with dealer traceability necessities; guidelines towards manipulative design; and transparency round product recommender algorithms.
Commenting in an announcement, Monique Goyens, director common at BEUC, accused {the marketplace} of being “rife with manipulative methods” designed to push customers to spend extra, and claimed inadequate details about merchants “steadily leav[es] customers at the hours of darkness about who they’re buying merchandise from.”
“This lack of traceability prevents customers from taking an knowledgeable determination or to know if a product complies with EU security guidelines,” she added.
The patron safety teams are additionally elevating issues about minor security, stating the intense worth discounting and gamification options baked into Temu’s platform are more likely to be enticing to youngsters.
“Temu doesn’t assure its customers a secure, predictable, and reliable on-line surroundings because the regulation requires,” they argue within the grievance. “Amongst different issues, now we have sturdy issues that customers are falling prey to manipulative methods, that Temu fails to make sure the traceability of the merchants working on its platform, or that its total functioning stays opaque, all of which breach the Digital Companies Act.”
“In the end, the excessive variety of harmful merchandise offered on Temu by untraceable merchants, via manipulative practices and opaque recommender programs, are elements of a poisonous cocktail more likely to impair minors’ privateness, security, and safety,” the teams additionally warn.
The coordinated complaints observe some particular person actions by shopper teams involved in regards to the security and legality of merchandise on the market on Temu’s market.
For instance, final fall, Italian shopper group Altroconsumo ran a take a look at of cosmetics bought on the platform and located the overwhelming majority did not checklist (or totally checklist) elements. Earlier this yr, the German shopper organisation vzbv raised issues about deceptive product evaluations and worth reductions displayed on the platform.
As Temu isn’t at present a chosen VLOP, its oversight with the DSA’s common guidelines falls to competent Digital Companies Coordinators in EU Member States the place its service operates. Eire’s media watchdog, the Coimisiún na Meán, is within the body as Temu opened an workplace in Dublin a yr in the past.
Nevertheless the grievance is more likely to amp up stress on the EU to designate Temu as a VLOP. A Fee spokesperson advised us it’s conscious of Temu lately reporting greater than 45 million month-to-month lively customers within the EU — which is the brink for triggering VLOP standing — including: “We’re in touch with the platform in view of a doable designation sooner or later.”
Temu has been contacted for remark.
Final month Shein, one other Chinese language e-commerce big that’s been locked in a fierce rivalry with Temu — together with in relation to worldwide market growth — was designated by the EU as a DSA VLOP after reporting passing the 45M MAUs threshold.
Whereas, again in March, the EU opened its first DSA investigation on a market, focusing on one other China-owned ecommerce platform — Alibaba’s AliExpress — which had been named a VLOP within the first wave of designations in April final yr.
The Fee stated then that it suspects AliExpress of breaching DSA guidelines in areas linked to the administration and mitigation of dangers; content material moderation and its inside grievance dealing with mechanism; transparency of promoting and recommender programs; traceability of merchants; and information entry for researchers. The investigation — certainly one of a number of the EU has opened into VLOPs since final yr’s compliance deadline for these bigger platforms kicked in — stays ongoing.