Client safety teams throughout the European Union have filed coordinated complaints in opposition to Temu, accusing the Chinese language overpriced e-commerce platform of a lot of violations associated to the bloc’s Digital Providers Act (DSA). Temu solely launched within the area a yr in the past, however not too long ago reported exceeding 75 million month-to-month customers.
Fines for confirmed violations of the Web governance and market security regime within the EU can attain as much as 6% of the worldwide annual turnover of the mother or father platform. For some background, Temu Pinduoduo’s mom reported revenues of almost $35 billion for 2023, almost double the earlier yr; Temu is estimated to have accounted for about 23% of that quantity final yr.
BEUC, a European client group representing 45 regional client safety teams in 31 EU international locations, mentioned on Thursday it had lodged a grievance in opposition to Temu with the European Fee, urging the EU to urgently designate it a “very giant on-line platform” (VLOP). below the DSA. (VLOP standing will imply Temu should adjust to further algorithmic transparency and accountability guidelines, together with systemic danger mitigation. Different e-commerce VLOPs embody Alibaba, Amazon, Reserving.com, Google Procuring and Zalando.)
On the similar time, 17 BEUC member organizations throughout the bloc have lodged DSA complaints with their nationwide client safety authorities, accusing Temu of breaching the overall guidelines of the regulation, which have utilized to Temu since mid-February.
The coordinated complaints allege that the e-commerce large is failing to adjust to a lot of DSA necessities, together with dealer monitoring necessities; guidelines in opposition to manipulative design; and transparency round product suggestion algorithms.
Commenting in an announcement, Monique Goyens, CEO of BEUC, accused the market of being “rife with manipulative strategies” geared toward encouraging customers to spend extra and mentioned there was inadequate details about merchants who “usually depart[es] customers are at midnight about who they’re shopping for merchandise from.’
“This lack of traceability prevents customers from making an knowledgeable choice or realizing whether or not a product complies with EU security rules,” she added.
Client rights teams have additionally raised considerations concerning the security of minors, noting the acute value reductions and gamification options included in Temu’s platform which can be prone to attraction to kids.
“Temu doesn’t present its customers with a secure, predictable and dependable on-line surroundings as required by legislation,” they allege within the grievance. “Amongst different issues, we’re deeply involved that customers are falling sufferer to manipulative strategies, that Temu doesn’t present monitoring of merchants working on its platform, or that its functioning stays opaque usually, all in violation of the Digital Providers Act. »
“In the end, the big variety of unsafe merchandise bought on Temu by untraceable retailers via manipulation and opaque suggestion techniques are components in a poisonous cocktail that may compromise the privateness, security and safety of minors,” the teams additionally warn.
The coordinated complaints comply with separate actions by client teams involved concerning the security and legality of merchandise bought on the Temu market.
For instance, final fall, Italian client group Altroconsumo examined cosmetics bought on the platform and located that the overwhelming majority didn’t checklist (or utterly) the components. Earlier this yr, the German client group vzbv raised considerations about false product opinions and value reductions displayed on the platform.
As Temu will not be presently a delegated VLOP, its compliance with the overall DSA guidelines rests with the competent digital service coordinators within the EU Member States the place the service operates. Eire’s media watchdog, Coimisiún na Meán, has been within the image since Temu opened an workplace in Dublin a yr in the past.
Nonetheless, this grievance is prone to improve strain on the EU to designate Temu a VLOP. A Fee spokesperson informed us that he’s conscious that Temu not too long ago reported greater than 45 million month-to-month energetic customers within the EU – the edge for triggering VLOP standing – including: “We’re in touch with the platform relating to a attainable designation in of the longer term.”
Temu has been contacted for remark.
Final month, Shein, one other Chinese language e-commerce large that has been locked in fierce competitors with Temu — together with over worldwide enlargement — was assigned an EU DSA VLOP after it reported that it had surpassed the 45 million MAU threshold .
Whereas again in March, the EU launched its first DSA investigation into the market, focusing on one other Chinese language-owned e-commerce platform — Alibaba AliExpress — which was named VLOP within the first wave of designations final April.
On the time, the Fee mentioned it suspected AliExpress of violating DSA guidelines in areas associated to danger administration and mitigation; content material moderation and inner complaints mechanism; transparency of promoting and suggestion techniques; monitoring merchants; and entry to information for researchers. The investigation — one in all a number of the EU has opened into VLOPs since final yr’s compliance deadline for these giant platforms — is ongoing.
