The Chinese online retailer is the second company to receive a fine under the DSA, after Elon Musk X was fined at the end of last year.
The European Commission has fined Termu €200m for breaching the Digital Services Act (DSA).
The Commission hit Temu with a fine for failure to “actively identify, analyze and evaluate the systemic risks of illegal products offered in its territory and the resulting harm to consumers in the European Union”, according to a statement issued today (28 May).
“The fine issued today was calculated taking into account the nature of the infringement, its gravity in relation to the EU users concerned, and its duration,” reads the Commission’s press release. “Failure to carry out a proper risk assessment – one of the building blocks of DSA – is a serious breach of DSA law.”
The EU first opened an investigation into Termu – previously designated as the largest online platform under the DSA – in October 2024, following an analysis of the company’s response to the Commission’s request for information on how it deals with the presence of traders selling illegal products on its online marketplace.
In July of last year, the Commission issued its first investigative assessment, which found that Temu was in breach of the DSA by failing to properly assess the risks of illegal products sold on its online marketplaces.
In its first assessment, the Commission said that consumers are “more likely” to find products on the market that do not comply with EU rules such as children’s toys and small electronics.
An inspection by independent consumer organization BEUC made similar findings at the same time, reporting that a high number of toys bought from Temu contained illegal amounts of borates – which can harm reproductive systems – and hormone-disrupting chemicals called phthalates.
In today’s release, the Commission mentioned the evidence from the mystery shopping process carried out as part of the investigation showed that “a very high percentage of selected chargers fail basic tests, while a high percentage of children’s toys tested pose a safety risk of medium to high severity, as they contain chemicals that exceed legal safety limits or pose suffocation risks due to removable parts”.
As well as the sale of illegal products, the EU investigation aimed to examine Temu’s content and product recommendation systems.
Today, the Commission said that Temu’s risk assessment from 2024 “did not properly assess how the design of his service – including recommendation programs and product promotion programs through partner promoters – could increase the risk of distribution of illegal products”.
‘Application’
Temu now has until August 28 to submit an “action plan” to the European Commission as required by the DSA. The system must put in place measures to correct breaches of its risk assessment obligations, according to the EU.
Once the application is submitted, the European Board for Digital Services – an independent advisory group set up by the DSA to enforce consistent application of EU rules – will have one month to issue its opinion on the plan. The Commission will then have another month to adopt its final decision and set a “reasonable time frame”.
If Temu fails to comply with today’s decision, the company may be subject to “penalty payments” from time to time.
“Risk assessment is not box-ticking – it is the core of DSA,” said Henna Virkkunen, the Commission’s senior vice president for technology, security and democracy.
“Temu’s risk assessment underestimates the physical risks, lacks specifics, is not based on strong evidence, and is incomplete. It leaves regulators, users, and the public in the dark about the true extent of potential harm from illegal products sold at Temu. Now is the time for Temu to comply with the law.”
Temu is the second company to receive a fine under the DSA, after Elon Musk X was fined €120m for breaching transparency obligations under the law. Soon after the fine was issued, the social media blocked the EU’s ad account.
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