EU fines Temu €200m over sale of illegal products

The European Union has imposed a €200 million fine on Chinese-owned online retailer Temu for allowing the sale of illegal products, including dangerous baby toys and defective 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.

Under the EU's Digital Services Act (DSA), designated Very Large Online Platforms (VLOPs), such as Temu, are required to "diligently assess systemic risks linked to their services and adopt corresponding mitigation measures".

As part of the commission's investigation, mystery shopping exercises showed a high percentage of baby toys contained chemicals or posed suffocation hazards.

Device chargers also failed basic safety tests, the commission said.

It said the €200m fine was "calculated taking into account the nature of the infringement, its gravity in terms of affected EU users, and its duration".

It added that failure to properly carry out risk assessments was a particularly "serious infringement of the DSA".

A Temu spokesperson said that while the company respects "the objectives of the Digital Services Act", it considers the fine to be "disproportionate".

The spokesperson added: "The decision relates to our first DSA assessment in 2024 and does not reflect the current state of our systems."

The spokesperson said that Temu has engaged constructively with the commission throughout the process and has since taken further steps to strengthen risk assessment, platform governance and user protection.

Temu is "reviewing the decision carefully and considering all available options".