EU fines Temu €200 million over sales of illegal products

The European Commission has hit Chinese-owned online marketplace Temu with a €200 million fine, accusing the retailer of letting illegal products flow to shoppers across the bloc, including unsafe baby toys and faulty chargers.

“The company failed to diligently identify, analyse and assess the systemic risks of illegal products being offered on its platform and the resulting harm to consumers in the European Union,” the European Commission said in a statement.

It said the evidence suggests EU consumers are highly likely to come across illegal goods while using Temu.

According to the commission, a 2024 risk assessment carried out by Temu did not meet the requirements set out under the Digital Services Act (DSA).

“Evidence from a mystery shopping exercise included in the commission’s investigation shows that a very high percentage of the selected chargers failed basic safety tests, while a high percentage of tested baby toys posed safety risks of medium to high severity, as they contain chemicals exceeding legal safety limits or pose suffocation hazards due to detachable parts,” it added.

The EU also said Temu failed to properly examine how features built into its platform — including recommender systems and product-promotion programmes involving affiliated influencers — could increase the spread of illegal goods.

Under the DSA, platforms designated as Very Large Online Platforms, or VLOPs, must carefully assess the systemic risks tied to their services and put in place measures to reduce them.

Temu has until 28 August 2026 to hand the commission an action plan detailing how it will address the breach of its risk-assessment duties.

The European Board for Digital Services will then have one month from receiving that plan to issue its opinion.

Henna Virkkunen, European Commission Executive Vice-President for Tech Sovereignty, Security and Democracy, said risk assessments are not a bureaucratic formality but a core pillar of the DSA.

“Temu’s risk assessment underestimates concrete risks, lacks specificity, is not grounded in solid evidence, and is not comprehensive,” Ms Virkkunen said.

“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,” she added.

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A Temu spokesperson said the company respects the aims of the DSA and recognises the need for rules that are clear and consistently applied across the digital economy.

“However, we disagree with the European Commission’s decision and consider the fine to be disproportionate,” the company said.

“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.

“We will continue to engage with regulators in good faith and work toward a marketplace that serves consumers, businesses, and communities responsibly.

“We are reviewing the decision carefully and considering all available options,” Temu said.

Digital Services Act finally baring its teeth – Andrews

Fianna Fáil MEP for Dublin Barry Andrews welcomed the penalty, saying it marked “the Digital Services Act finally baring its teeth”.

Speaking on RTÉ’s Drivetime, Mr Andrews said he had been trying to draw attention to “the dangers to the environment, the dangers to labour rights, dangers to consumer safety associated with these very large online platforms, particularly Temu and Shein”.

“I think it is really welcome. These online platforms just don’t carry out sufficient risk assessment in my opinion and this is borne out by the judgment of the European Union on this case,” he said.

Asked about the appeal of the ultra-cheap products sold by companies such as Temu, he said he had some sympathy for consumers but argued the low prices amounted to a “false economy” if spending a little more would mean buying products that last.

“The reality is these are not sustainable products from an environmental point of view and they’re not durable from a consumer point of view,” he said.