CHEAP FAKE POTATO: The European Commission has concluded the first part of its investigation into Temu's business practices. The Chinese online marketplace for low-cost goods is not doing enough to prevent the sale of illegal products, thereby violating a key requirement of Europe's new rules for large digital marketplaces.
The European Commission has announced its second fine ever against an international company for violating the Digital Services Act. Temu, the controversial Chinese online marketplace for low-cost products, was found to have played a role in the sale of illegal goods that could have harmed consumers in the European Union.
The EC fined Temu €200 million (about $232 million), stating that the company failed to properly assess the risks associated with unlawful products sold through its platform. Brussels authorities said European customers were likely encouraged to purchase illegal goods, as the platform is saturated with low-cost knockoffs that are not effectively filtered.
Although the investigation began in 2024 and is still ongoing, the EC said it had gathered sufficient evidence to impose an initial fine. According to regulators, the company provided a generic risk assessment that lacked specific analysis of its own platform and did not adequately reflect its reporting or testing efforts.
