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Brussels is getting ready to launch an investigation into Temu, the Chinese language on-line purchasing enterprise, amid considerations that the ecommerce platform is failing to crack down on gross sales of unlawful merchandise.
The probe may very well be launched in coming days beneath the bloc’s Digital Companies Act, based on two EU officers aware of the matter. It may end in fines of as much as 6 per cent of Temu’s international annual income.
The European Fee earlier this month requested Temu to supply details about its actions to curb gross sales of unlawful objects “in addition to dangers regarding shopper safety, public well being and customers’ wellbeing”, it mentioned.
Temu replied on Friday, mentioned a fee spokesperson. The corporate’s solutions have been being analysed and will result in an official probe being launched, however no closing choice had been made so far, the spokesperson added.
Bloomberg on Wednesday first reported the upcoming probe.
Client teams have warned a few excessive proportion of harmful merchandise bought by on-line platforms together with China’s Temu and Shein, which don’t adjust to EU security and shoppers’ laws, and bypass controls by promoting on to clients.
A latest survey which examined toys bought on Temu and different on-line platforms discovered that 80 per cent of the objects have been poisonous or posed well being hazards for kids.
Platforms usually are not accountable for merchandise bought by different distributors, however they are often investigated for failure to police content material and items accessible for purchasers to purchase.
Brussels has adopted extra aggressive insurance policies within the digital area because it tries to counter the dominance of huge on-line retailers and repair suppliers. The Digital Companies Act, handed in 2022, provides the fee sweeping powers to effective massive on-line corporations for failing to police unlawful content material on their platforms. This 12 months Brussels opened formal investigations into Meta, AliExpress, TikTok and X.
Temu, which was launched in 2022, has quickly expanded to nearly 50 international locations within the area of two years due to an ultra-low pricing technique.
However cracks are starting to point out within the meteoric progress of proprietor PDD Holdings whose shares plunged 18 per cent in August after posting decrease than anticipated income of Rmb97.1bn ($13.6bn) for the three months ending in June.
The fee earlier this 12 months designated Temu as a “Very Giant On-line Platform” which locations it beneath higher scrutiny from Brussels. The platform was first requested to supply extra info on its efforts to manage the sale of unlawful items, together with the fast-fashion retailer Shein, in June.
As soon as launched, the proceedings in opposition to Temu might be dropped at any level if the corporate agrees to take extra forceful motion in opposition to the sale of unlawful items.
Temu didn’t instantly reply to a request for remark.
