EU ramps up probe into Temu over illegal product sales

The European Union (EU) has increased its investigation into the Chinese e-commerce platform Temu.

The inquiry focuses on the company’s failure to adequately assess the sale of illegal products on its site.

On July 29, 2025, the Commission announced that Temu’s October risk assessment underestimated the presence of unsafe and counterfeit goods. These include baby toys and electronics available to EU consumers.

Henna Virkkunen, the EU’s digital chief, said that Temu does not meet the standards set by the Digital Services Act (DSA).

“Consumers’ safety online is not negotiable in the EU,” she said.

The investigation, which began last year, accuses Temu, a subsidiary of PDD Holdings Inc., of various issues.

These include using addictive design features and failing to prevent the sale of illegal goods.

Additionally, a separate investigation under EU consumer protection laws is looking into claims of fake discounts and misleading reviews.

Temu has the opportunity to respond to the findings or propose solutions to address the Commission’s concerns. If the company does not comply, it could face fines of up to 6% of its annual global revenue under the DSA.

A spokesperson for Temu said that the company will “continue to cooperate fully with the Commission.”

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ DSA enforcement demonstrates EU’s serious commitment to marketplace accountability

The Temu investigation showcases how the Digital Services Act’s enforcement mechanisms work in practice, particularly for platforms that handle third-party sellers.

The DSA, which took full effect in February 2024, specifically requires online marketplaces to ensure sellers provide verified identity information and inform users about illegal products sold 1. The potential fine of up to 6% of global annual turnover represents one of the most severe penalty structures in global tech regulation 2.

This enforcement approach reflects the EU’s strategy of using financial penalties substantial enough to change corporate behavior, rather than symbolic fines that large platforms can easily absorb.