EU asks Temu for information about illegal trading on its platform under DSA

14 Oct 2024

Image: © Mickis Fotowelt/Stock.adobe.com

Temu has until 21 October to supply the requested information, then the EU will consider its next steps.

The European Commission has requested Chinese online retailer Temu to provide details and internal documents about how it tackles the presence of traders selling illegal products in its online marketplace.

Temu, with a monthly user base of 75m, was designated as a Very Large Online Platform (VLOP) under the EU Digital Services Act (DSA) earlier this year, which means that the company is now subject to the “most stringent rules” under the Act.

The Commission has asked the online retailer about its mitigation efforts against illegal product trading, as well as information on risks relating to consumer protection, public health and users’ wellbeing. It also asked Temu for information on its recommender systems and the risk to the protection of users’ personal data.

In the request for information (RFI) sent to Temu last Friday (11 October), the Commission gave the online retailer until 21 October to supply the requested information.

Temu told the Business Post that it has taken “significant measures” since being designated a VLOP.

“Consumer safety is a top priority, and we welcome feedback from all stakeholders as we work to provide access to quality, affordable products for our consumers.”

The Commission will determine its next steps following an assessment of Temu’s response, which could result in a formal investigation into the company. Under the DSA, the EU can impose fines for incorrect, incomplete or misleading information in response to an RFI. If Temu does not respond by the deadline, it could also face periodic penalty payments.

This, however, is not the first time Temu has come under the EU’s radar. In July, e-commerce giants Temu and Shein were sent formal RFIs on the measures they have taken to comply with DSA obligations including having a mechanism in place 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 that there is a “traceability of traders”.

The platforms were given four months, until late October, to comply with DSA’s rules.

The EU also used the DSA to go after Amazon, requesting that the online-retail giant Amazon share information regarding the transparency of its recommender systems and their parameters. These are algorithms that suggest content to users based on data it has gathered about those particular users.

And it sent a formal warning to X, informing the platform that it is in breach of the DSA in areas linked to dark patterns, advertising transparency and data access for researchers.

Dark patterns are deceptive design practices that have been crafted to intentionally trick us into doing things that are to the advantage of the supplier and, often, counter to our intentions. The DSA aims to go after this practice to ensure that large platforms don’t intentionally mislead users.

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Suhasini Srinivasaragavan is a sci-tech reporter for Silicon Republic

editorial@siliconrepublic.com