The European Union's technology regulator said on Thursday that Chinese cross-border e-commerce platform Temu had been fined 200 million euros (approximately $232 million) for failing to take adequate measures to prevent illegal goods from being sold on its platform. The decision stemmed from a nearly two-year investigation into the platform and was one of the first phased results of a larger enforcement action under the EU Digital Services Act (DSA). Regulators also warned that Temu may face further penalties in the coming months as the investigation progresses.
The investigation began after a complaint from the pan-European consumer organization BEUC and its 17 member institutions, and the European Commission launched a review of Temu's EU-wide compliance. The Commission found that Temu failed to diligently identify, analyze and assess the systemic risks of the sale of illegal goods on the platform, and failed to fully assess the potential harm caused by these risks to EU consumers. Regulators also criticized Temu for failing to fully assess how its recommendation algorithm and product promotion programs involving influencers associated with the platform could amplify the risk of illegal product sales.
Temu said in a statement that the company "respects the objectives of the Digital Services Act and the need to establish clear and consistent rules in the digital economy" but disagreed with the Commission's decision and considered the penalty "not proportionate". Temu said the decision was based on its first DSA compliance assessment in 2024 and "does not reflect the status of the current system." The company stated that it has maintained constructive communication with the European Commission throughout the process and has taken further strengthening measures in terms of risk assessment, platform governance and user protection. Temu also stressed that it would continue to engage with regulators and "consider all options" to defend its position.
According to the European Commission's request, Temu has until August 28 to submit an action plan describing the improvements it will take to meet its DSA obligations. The regulator will assess whether its actions are sufficient for compliance within two months. "This is essentially about risk management and is one of the cornerstones of DSA," EU digital affairs chief Henna Virkkunen said at the press conference, adding that the decision sent a "very strong signal" to Temu. She also pointed out that regulatory agencies will continue to investigate whether the Temu service design itself is addictive, whether the platform sells illegal goods at a broader level, and the issue of opening data to recommendation system stakeholders and researchers.
According to the provisions of the Digital Services Law, if relevant companies are found to have violated the rules, they can be fined up to 6% of their global annual turnover. The penalty against Temu is the second fine issued under the DSA framework. In December last year, Elon Musk’s social media platform X was fined 120 million euros by the EU for violating online content rules. Converted according to the exchange rate used in the report, 1 US dollar is equivalent to approximately 0.8613 euros.
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