The European Commission has fined Chinese e-commerce giant Temu €200 million under the Digital Services Act for failing to properly identify and address the risks posed by illegal and unsafe products sold to consumers across the EU.
The fine follows a formal investigation launched in October 2024 into whether Temu was meeting its obligations as a designated Very Large Online Platform under EU law, and involved a mystery shopping exercise carried out by an independent testing organisation. The Commission concluded that the company failed to diligently identify, analyse and assess the systemic risks of illegal products on its platform and the resulting harm to consumers.
Evidence from the mystery shopping exercise showed that a very high percentage of selected chargers failed basic safety tests, while a high percentage of tested baby toys posed safety risks of medium to high severity, containing chemicals exceeding legal safety limits or presenting suffocation hazards due to detachable parts. Commission officials noted that in some cases chargers overheated and caught fire. Jewellery and accessories were also found to carry risks of mislabelling, non-compliance with European standards and the presence of hazardous materials.
Product promotion programmes
The Commission was clear that the problem extends beyond individual products. One official said the case is not about "100 or 200 illegal products" but about whether the platform has the mechanisms in place to detect and prevent illegal items from reaching European consumers in the first place. The Commission also found that Temu did not properly assess how the design of its service, including recommender systems and product promotion programmes by affiliated influencers, could amplify the risks of illegal products spreading across its platform.
EU Commission Executive Vice-President Henna Virkkunen said risk assessments are not box-ticking exercises but the backbone of the DSA, adding that Temu's assessment underestimates concrete risks, lacks specificity, is not grounded in solid evidence and is not comprehensive.
The €200 million fine is the largest imposed under the DSA so far and only the second non-compliance decision issued under the law. The first was a €120 million fine against X, Elon Musk's social media platform, issued last December. Under the DSA, the Commission can impose fines of up to 6% of a company's global annual turnover, though officials stressed that this ceiling is a maximum, not a target.
The response
Temu said it disagreed with the decision and considered the fine disproportionate, adding that it relates to its first DSA assessment in 2024 and does not reflect the current state of its systems. The company said it had engaged constructively with the Commission throughout the process and had since taken further steps to strengthen risk assessment, platform governance and user protection, and that it was considering all its options.
Temu now has until 28 August 2026 to submit an action plan to the Commission setting out how it will remedy its risk-assessment failures. The European Board for Digital Services will have one month to evaluate the plan, after which the Commission will have a further month to issue a final ruling and set an implementation timeline. The Commission noted that other investigations into Temu remain ongoing, covering the spread of illegal products, recommender systems and addictive design practices, leaving open the possibility of further fines.
Source: CNA
