The Chinese e-commerce platform faces a
penalty of more than $230 million for selling baby toys and other products the
European Commission said could harm consumers.
·
The
European Commission fined Chinese e-commerce platform Temu
€200 million ($232 million) for failing to adequately prevent the sale of
illegal and unsafe products in the European Union.
·
The
penalty was imposed under the European Union Digital Services Act (DSA), the
bloc’s major online platform regulation framework.
·
Temu has been ordered to submit a compliance
plan by 28 August 2026 and may appeal the decision.
·
The
European Commission said Temu failed to properly
identify and limit:
o unsafe products,
o counterfeit goods,
o and noncompliant items sold on its
platform.
·
EU
authorities conducted a “mystery shopping” investigation that found:
o many chargers failed basic safety
standards,
o and several baby toys posed serious safety
risks.
·
Officials
stated some toys:
o exceeded legal chemical limits,
o or created suffocation hazards.
·
Henna
Virkkunen said Temu’s risk assessment left regulators
and consumers “in the dark” regarding the scale of harm from illegal products.
·
She
stated that Temu must now fully comply with EU law.
·
The EU
has intensified scrutiny of Chinese e-commerce companies amid concerns over:
o unfair competition,
o low-cost imports,
o consumer safety,
o and market distortions.
·
The
European Commission has also launched investigations into:
o Shein
o and AliExpress.
·
On the
same day, the Commission opened a probe into JD.com’s
proposed acquisition of German electronics retailer Ceconomy.
·
EU
officials cited concerns that JD.com may have benefited from foreign subsidies
that could distort competition in Europe.
·
The
case reflects broader international pressure on Chinese online retail
platforms.
·
Temu previously stopped shipping products
directly from China to U.S. customers after the United States ended a tariff
exemption for low-value imports from China.
·
European
leaders are increasingly debating stronger industrial and trade measures to
reduce dependence on Chinese goods and protect European manufacturers.
·
All 27
EU commissioners are scheduled to discuss additional trade and industrial
responses to China during upcoming policy meetings.
The
low-cost Chinese e-commerce platform Temu was fined 200
million euros ($232 million) by the European Union on Thursday for failing to spot
and curb the sale of illegal products.
The
European Commission, the bloc’s executive arm, said Temu
had violated the European Union’s Digital Services Act, the bloc’s wide-ranging
law that polices online practices. Temu is required to
submit a plan to address the breaches by Aug. 28. It could also appeal.
The
commission opened its investigation into Temu in 2024,
one year after the company first expanded into Europe, amid what it called “a steady
surge” in products sold online that it said were “unsafe, counterfeit or noncompliant.”
The goods were potentially harmful to consumers, the environment and “fair competition,”
officials said.
The
European Union said on Thursday that Temu had been subject
to a mystery shopping exercise as part of the investigation. In that test, “a very
high percentage” of chargers failed basic safety tests and many baby toys “posed
safety risks.” The toys contained chemicals that were above legal limits or posed
suffocation hazards, the statement noted.
The
fine was the second against a company for violating the Digital Services Act. The
commission previously fined X the equivalent of $139 million over transparency issues
under the act. Technology firms have been hit with larger fines under other E.U.
rules.
“We
will continue to engage with regulators in good faith, while reviewing the decision
carefully and considering all available options,” a Temu
spokesperson said in a statement.
Temu is owned by the Chinese tech giant PDD
Holdings and serves millions of shoppers outside China, including in the European
Union’s large market of 450 million consumers. It sells clothing, beauty products,
home goods and other items.
The
company’s assessment of its risks “leaves regulators, users and the public in the
dark about the true scale of potential harm posed by illegal products sold on Temu,” Henna Virkkunen, the European Commission official responsible
for technology, said in a statement.
“Now
it is time for Temu to comply with the law,” she added.
European
officials have been grappling with how to control the flow of goods from China and
protect local companies struggling to compete with China’s manufacturing dominance
— an issue that spans cheap everyday goods, electronics, automobiles and more. The
European Commission has also opened investigations into Shein and AliExpress, two
of Temu’s Chinese competitors.
On
Thursday, the commission announced an investigation into the Chinese e-commerce
company JD.com’s proposed purchase of Ceconomy, a German electronics retailer. It cited “concerns
that JD.com may have been granted foreign subsidies” that could distort the market.
There
has also been a broader global pushback against Chinese e-commerce companies. Temu said it stopped shipping its products from China to customers
in the United States last year, after the Trump administration closed a loophole
for Chinese companies to avoid import fees on shipments worth $800 or less.
European
officials are considering what broader measures could help to limit China’s dominance,
while helping European companies to maintain market share.
All
27 European commissioners will meet on Friday for a debate about what additional
trade and industrial measures may be needed as they contend with a challenging era
of trade relations with China. The topic is expected to come up repeatedly in the
coming weeks, including at a meeting of leaders from around the European Union in
June.