Chinese e-commerce platform Temu is facing the risk of a "massive fine" amounting to up to 6% of its global annual revenue. On July 28 (local time), the European Union (EU) reached a preliminary conclusion that Temu had violated the Digital Services Act (DSA) by failing to take sufficient measures to prevent the sale of illegal products.
The European Commission announced on this day the results of its preliminary investigation, stating that Temu did not fulfill its obligations under the DSA, which requires platforms to properly assess the risk of illegal products being distributed.
The Commission pointed out, "There is a very high risk that European consumers may encounter illegal products," and added, "According to the results of a mystery shopping exercise, the likelihood of encountering products that violate regulations, such as toys for infants or small electronic devices, was extremely high."
The DSA is a law introduced to prevent the spread of online disinformation, harmful and illegal goods, and content, as well as to protect minors. If a violation is confirmed, a fine of up to 6% of global annual revenue can be imposed.
Temu has the right to contest the results of this preliminary investigation. The Commission will take this into consideration before making a final decision regarding Temu's non-compliance with the DSA.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
