Chinese online retailer Temu has been accused by EU regulators of failing to prevent illegal products from being sold on its platform.
The preliminary findings follow an investigation launched last year under the EU’s Digital Services Act (DSA).
It is a broad set of rules that requires online platforms to take extra measures to ensure the safety of internet users, under threat of large fines.
The European Commission, the executive arm of the 27-nation bloc, said its investigation found “a high risk for EU consumers of illegal products” on the Temu site.
Investigators conducted an “undercover audit” that found “non-compliant” products on Temu, including children’s toys and small electronics, the report said.
In a brief statement, Temu said it would “continue to cooperate fully with the commission.”
The commission did not specify why the products were illegal, but noted that the surge in online sales in the bloc had been accompanied by a parallel rise in the number of unsafe or counterfeit goods.
EU regulators said they would investigate whether Temu was doing enough to stop “illegal traders” selling “non-compliant goods” after launching an investigation, amid concerns they could quickly re-emerge after being suspended.
In its preliminary findings, the commission concluded that Temu may have had “inadequate mitigation measures” because the company used an “imprecise” risk assessment based on general industry information rather than specific data about its own market.
“We shop online because we know that the products sold on our single market are safe and comply with our rules,” Henna Virkkunen, the EU’s executive vice-president for technological sovereignty, security and democracy, said in a press release.
“In our preliminary view, Temu falls far short of assessing the risks to its users to the standards required by the Digital Services Act.”
Temu has gained popularity by offering cheap goods, from clothing to home goods, sourced from sellers in China.
The company, which is owned by Pinduoduo, a popular e-commerce site in China, has 92 million users in the EU.
The company will have the opportunity to study the commission’s investigation materials and respond to the allegations before EU regulators make a final decision.
Violation of the DSA can result in fines of up to 6% of a company’s annual global revenue and an order to correct the problems.
Sourse: breakingnews.ie