If the company is found to have violated the new digital services law, it could face large fines.
The EU has launched a formal investigation into Chinese online store Temu over concerns about illegal sales goods.
The Guardian reports this.
The European Commission has stated concerns that the platform, owned by PDD Holdings, violates the new Digital Services Act (DSA), which regulates the activities of technology companies. Among them are concerns that the platform does not have sufficiently robust systems in place to stop unscrupulous sellers from reappearing, with products appearing again, sometimes within days of being removed, and selling counterfeit products.
A senior EU Commission official said concerns about the sale of counterfeit food, pharmaceuticals, cosmetics and toys had been raised by authorities across Europe, particularly in Germany, Denmark and Ireland, where the company has its EU headquarters.
“We have received a lot of information from other authorities, but there is a real suspicion that not enough is being done, effectively, to really prevent the spread of illegal products,” they said.
The Commission is also concerned about aggressive sales tactics on the platform with “appealing designs”, including “game rewards”.
If the company is found to have violated the DSA, it could face large fines. The EC stresses that at this stage these are only suspicions and the investigation is intended to determine whether the problem is systemic.
Complaints against Temu were brought by a pan-European consumer group, which claimed that the company was violating the DSA by failing to provide customers with important information about sellers on its platforms.
Since launching in April last year, the service has grown rapidly in the EU market, selling everything from cosmetics to clothing, as well as furniture and appliances, directly from China, and has around 100 million users.
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