European Union regulators have imposed a €200 million fine on the shopping website Temu for failing to stop the sale of illegal and dangerous products. The penalty, equivalent to £173 million, was announced by the European Commission following a 19-month investigation that revealed consumers were highly likely to encounter illegal or unsafe items on the platform, including baby toys and electronics.
Investigation Findings
An unpublished mystery shopping exercise conducted for the commission found a "high percentage" of unsafe baby products and a "very high percentage" of dangerous chargers for sale on Temu. Additionally, unsafe clothing and jewellery were also identified. Consumer groups across Europe have previously reported baby toys with loose parts posing choking hazards, dummy chains long enough to strangle a child, jewellery containing dangerous metals like lead, clothes made with banned chemicals, and chargers that could cause burns, electric shocks, or fires.
Website Design Criticized
The commission also criticized Temu for inadequate controls over its website design. It stated that recommender systems and promotions by influencers "could amplify dissemination risks of illegal products." This marks the second and highest-ever fine imposed under the EU's Digital Services Act (DSA), which has applied to major tech companies since February 2024. The previous record was a €120 million penalty issued to Elon Musk's X in December for deceptive verification badges and lack of advertising transparency.
Serious Breach of DSA
A senior EU official said the commission found a particularly serious breach of the act related to an inadequate risk assessment on unsafe products that Temu conducted in 2024. The fine represents only a fraction of Temu's fast-growing revenues. Its parent company, PDD Holdings, reported global revenues of $54 billion (£40 billion) in 2024, which includes income from another Chinese e-commerce site, Pinduoduo. Under the DSA, a company can be fined up to 6% of its global turnover.
Ongoing Investigation
The senior EU official stated that the fine was proportionate and that other parts of the investigation into Temu, which could lead to additional financial penalties, are continuing. The commission is also examining the sale of illegal products, addictive design features, and whether independent researchers have access to Temu's data.
Henna Virkkunen, the European Commission vice-president leading tech regulation, said: "Temu's risk assessment underestimates concrete risks, lacks specificity, is not grounded in solid evidence, and is not comprehensive. It leaves regulators, users, and the public in the dark about the true scale of potential harm posed by illegal products sold on Temu. Now it is time for Temu to comply with the law."
Temu's Response
Temu, which has the right to appeal the fine, said it is "reviewing the decision carefully and considering all available options." A company spokesperson stated: "Temu respects the objectives of the Digital Services Act and the need for clear, consistent rules across the digital economy. However, we disagree with the European Commission's decision and consider the fine to be disproportionate. The decision relates to our first DSA assessment in 2024 and does not reflect the current state of our systems. Temu engaged constructively with the commission throughout the process and has since taken further steps to strengthen risk assessment, platform governance, and user protection."
Temu has until August 28 to submit an action plan to the commission outlining how it intends to remedy the situation.
