Temu and Shein face EU scrutiny over DSA compliance

1 Jul 2024

Image: © Koshiro/Stock.adobe.com

The request for information follows a complaint against Temu by the BEUC, which claimed the marketplace had failed to comply with DSA rules.

E-commerce giants Temu and Shein are being probed by the European Commission, which has requested information from these companies to show their compliance with the Digital Services Act (DSA).

The DSA is the EU’s new online regulation that includes strict rules on content moderation, advertising transparency and greater choice for users to control what they see.

Shein and Temu were recently listed as Very Large Online Platforms by the EU, which means these companies are subject to the “most stringent rules” of the DSA. But digital marketplace Temu, which has its European headquarters in Dublin, has also faced complaints from European consumer organisations.

As a result, the European Commission has sent formal requests for information to the two companies to see the measures they have taken to comply with certain DSA obligations. These obligations include having a mechanism that allows users to report illegal products, ensuring online interfaces are not designed in a deceptive or manipulative way, the protection of children and ensuring there is “traceability of traders”.

The complaint by the European consumer organisation BEUC in May claimed Temu does not guarantee its users a safe, predictable and trustworthy online environment. The complaint also included “strong concerns” that consumers were falling for “manipulative techniques” on the site.

Both Temu and Shein have until 12 July to provide the requested information to the European Commission. Depending on the information provided, the Commission could take further action and launch a formal investigation.

“Temu and Shein have four months from the designation to comply with the more stringent rules under the DSA, notably the obligation to duly assess and mitigate any systemic risks stemming from their services, such as the dissemination of unsafe and counterfeited products,” the European Commission said.

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Leigh Mc Gowran is a journalist with Silicon Republic