The European Union (EU) has told Chinese online retailer Temu to put an end to its “problematic” commercial practices or risk facing penalties, the 27-nation bloc’s executive arm said on Nov. 8.
The European Commission’s move follows the launch of an investigation into whether Temu adequately prevented the sale of illegal products on its platform, adding to the regulatory hurdles it’s already grappling with in the EU.
The alleged problematic practices include showing non-existent discounts, using tactics like fake countdown timers or limited stocks to pressure users into making quick purchases, displaying partial or wrong information about consumers’ rights to return or refunds, and lacking terms to verify the authenticity of product reviews. The Commission noted that national regulators have found reviews they suspected to be fake.
Furthermore, authorities criticized Temu for allegedly forcing users to play a game called “Spin the Fortune Wheel” to access the platform while obscuring the terms and conditions linked to potential rewards.
Additionally, the authorities took aim at Temu for allegedly failing to provide clear contact information, which complicates matters for consumers looking to ask questions or lodge complaints.
The commission has granted Temu a one-month deadline to respond and explain how it plans to address these issues.
Should Temu’s responses not meet the regulators’ expectations, the Commission said its national consumer authorities could take action. This could include the imposition of financial penalties based on the company’s revenue in the respective countries where violations were observed, as well as the potential adoption of other regulatory measures aimed at ensuring compliance with consumer protection laws.
This investigation is a joint effort by the Commission and the national consumer authorities of Belgium, Germany, and Ireland through the EU’s Consumer Protection Cooperation Network.
Asked about the EU’s decision, Temu said they acknowledged the authorities’ concerns and expressed their commitment to collaborate with regulators to ensure compliance with EU laws.
“Although we have gained popularity with many consumers in a relatively short time, we are still a very young platform—less than two years in the EU—and are actively learning and adapting to local requirements,” a Temu spokesperson said in a statement to The Epoch Times on Nov. 11.
“We will fully cooperate with this investigation, as we believe that such scrutiny benefits consumers, merchants, and the platform in the long term.”
If Temu is found in violation of the DSA, it could face fines that go up to 6 percent of its global turnover.