The European Commission has fined ecommerce marketplace Temu €200 million for failing to mitigate against the risk of illegal products being sold on its platform, as the bloc cracks down on the Chinese retailer’s rapid expansion.The commission said on Thursday that Temu had not done enough to tackle the “systemic risks of illegal products being offered on its platform and the resulting harm to consumers” in the bloc. Under the Digital Services Act, large online platforms are required to assess those risks and tackle them.Temu has grown rapidly since entering the European market in 2023. The retailer undercuts local businesses on everything from T-shirts to phone chargers and home furnishings by shipping the goods directly from Chinese warehouses to western consumers’ homes.The low value of each order means they are not subject to import duties. However, from July the EU is introducing a flat customs duty of €3 an item on ecommerce parcels valued at less than €150, as part of efforts to stem the flow of low-value imports from China.Brussels has recently passed legislation to reinforce consumer protections and has other ongoing investigations into Temu rivals Shein and AliExpress.Temu is also subject to a separate European Union (EU) investigation into whether it has actually been selling illegal goods on its marketplace – such as toys or electrical devices that fail to meet the EU’s safety standards – rather than merely failing to safeguard against the risk of doing so.[ Two Chinese companies, Shein and Temu, are undercutting retailers in every countryOpens in new window ]France has been pushing particularly strongly for more forceful action against China-based online platforms for selling “dangerous” goods. Both retailers are being investigated over claims they sold childlike sex dolls on their marketplaces.Temu is only the second company to be penalised by the EU under its Digital Services Act (DSA), after Elon Musk’s X was fined €120 million in December last year.The punishment led to fierce pushback from the Trump administration, which claims the EU is unfairly targeting American tech companies and infringing freedom of speech principles.Will new pay transparency rules close the gender pay gap for good? Listen | 28:55Temu has until the end of August to submit an action plan to the commission setting out how it will apply detailed measures to assess and mitigate the risks of selling illegal products on its platform.Under the DSA the EU can impose fines of up to 6 per cent of a group’s annual global revenue if companies do not comply.Temu did not immediately respond to a request for comment. – Copyright The Financial Times Limited 2026