Client safety teams across the European Union have filed coordinated complaints in opposition to Temu, accusing the Chinese language-owned extremely low-cost e-commerce platform of a raft of breaches associated to the bloc’s Digital Companies Act (DSA). Temu solely launched within the area a few yr in the past however just lately reported blasting previous 75 million month-to-month customers.
Penalties for confirmed breaches of the EU’s on-line governance and market security regime can attain as much as 6% of the worldwide annual turnover of the platform’s father or mother. For some reference, Temu’s father or mother Pinduoduo reported revenues of almost $35 billion for 2023, almost double on the yr prior; Temu was estimated to account for about 23% of that quantity final yr.
BEUC, the European shopper group that represents 45 regional shopper safety teams throughout 31 EU international locations, mentioned Thursday it’s filed a criticism in opposition to Temu with the European Fee — calling for the EU to urgently designate it as a “very giant on-line platform” (VLOP) below the DSA. (VLOP-status would imply Temu has to adjust to extra algorithmic transparency and accountability guidelines, together with mitigating systemic threat. Different e-commerce VLOPs embody Alibaba, Amazon, Reserving.com, Google Purchasing and Zalando.)
On the similar time, 17 of BEUC’s member organizations across the bloc have filed DSA complaints with their nationwide shopper safety authorities — accusing Temu of breaching the regulation’s normal guidelines which have utilized to Temu since mid-February.
The coordinated complaints allege the e-commerce big is failing to fulfill a raft of DSA necessities, together with dealer traceability necessities; guidelines in opposition to manipulative design; and transparency round product recommender algorithms.
Commenting in an announcement, Monique Goyens, director normal at BEUC, accused {the marketplace} of being “rife with manipulative methods” designed to push customers to spend extra, and claimed inadequate details about merchants “ceaselessly leav[es] customers in the dead of night about who they’re buying merchandise from.”
“This lack of traceability prevents customers from taking an knowledgeable choice or to know if a product complies with EU security guidelines,” she added.
The patron safety teams are additionally elevating considerations about minor security, mentioning the intense value discounting and gamification options baked into Temu’s platform are prone to be engaging to kids.
“Temu doesn’t assure its customers a protected, predictable, and reliable on-line atmosphere because the legislation requires,” they argue within the criticism. “Amongst different issues, we’ve got robust considerations that customers are falling prey to manipulative methods, that Temu fails to make sure the traceability of the merchants working on its platform, or that its general functioning stays opaque, all of which breach the Digital Companies Act.”
“Finally, the excessive variety of harmful merchandise offered on Temu by untraceable merchants, by manipulative practices and opaque recommender techniques, are components of a poisonous cocktail prone to impair minors’ privateness, security, and safety,” the teams additionally warn.
The coordinated complaints comply with some particular person actions by shopper teams involved in regards to the security and legality of merchandise on the market on Temu’s market.
For instance, final fall, Italian shopper group Altroconsumo ran a check of cosmetics bought on the platform and located the overwhelming majority did not listing (or totally listing) components. Earlier this yr, the German shopper organisation vzbv raised considerations about deceptive product critiques and value reductions displayed on the platform.
As Temu isn’t at the moment a delegated VLOP, its oversight with the DSA’s normal guidelines falls to competent Digital Companies Coordinators in EU Member States the place its service operates. Eire’s media watchdog, the Coimisiún na Meán, is within the body as Temu opened an workplace in Dublin a yr in the past.
Nonetheless the criticism is prone to amp up stress on the EU to designate Temu as a VLOP. A Fee spokesperson advised us it’s conscious of Temu just lately reporting greater than 45 million month-to-month lively customers within the EU — which is the brink for triggering VLOP standing — including: “We’re in touch with the platform in view of a attainable designation sooner or later.”
Temu has been contacted for remark. Replace: The corporate despatched an announcement, describing itself as a “newcomer” to the area and saying it’s been taking suggestions from clients, regulators and shopper teams; and in addition claiming to have been adjusting the way it operates to align with native expectations. The assertion reveals that previously week Temu entered right into a “cease-and-desist declaration” with Germany’s vzbv. It suggests lots of this authority’s considerations overlap with the BEUC’s criticism about its practices, including that it’s dedicated to addressing the problems raised.
“Concerning the BEUC criticism, we take it very severely and can research it completely,” Temu additionally wrote. “We hope to proceed our dialogue with the related stakeholders to enhance Temu’s service for customers. The place we establish areas for enchancment, we’re desirous to work collectively to reinforce our service and to rectify any shortcomings. We maintain the curiosity of customers at coronary heart and attempt to supply a protected and trusted service that’s valued by customers and provides important worth. We’re dedicated to transparency and full compliance with all relevant legal guidelines and laws.”
Final month Shein, one other Chinese language e-commerce big that’s been locked in a fierce rivalry with Temu — together with in relation to worldwide market growth — was designated by the EU as a DSA VLOP after reporting passing the 45M MAUs threshold.
Whereas, again in March, the EU opened its first DSA investigation on a market, focusing on one other China-owned ecommerce platform — Alibaba’s AliExpress — which had been named a VLOP within the first wave of designations in April final yr.
The Fee mentioned then that it suspects AliExpress of breaching DSA guidelines in areas linked to the administration and mitigation of dangers; content material moderation and its inside criticism dealing with mechanism; transparency of promoting and recommender techniques; traceability of merchants; and information entry for researchers. The investigation — one among a number of the EU has opened into VLOPs since final yr’s compliance deadline for these bigger platforms kicked in — stays ongoing.
