(Bloomberg) -- Temu is at risk of being fined for breaching European Union consumer-protection law, adding to the e-commerce platform’s regulatory problems a week after the bloc opened a separate investigation into whether it’s doing enough to combat illegal sales.
The European Commission and national regulators, including Belgium, Germany and Ireland, jointly demanded that the platform halt “problematic practices” that have the potential to mislead consumers and are in violation of the EU’s product safety rulebook, it said in a statement on Friday.
These activities include posting fake discounts and reviews, forcing customers to play a “fortune wheel” game while hiding essential information about its conditions, displaying misleading information and hiding contact details for customers to file questions or complaints.
“Although we have gained popularity with many consumers in a relatively short time, we are still a very young platform — less than two years in the EU — and are actively learning and adapting to local requirements,” Temu said in an emailed statement. “We will fully cooperate with this investigation, as we believe that such scrutiny benefits consumers, merchants, and the platform in the long term.”
The demands mean additional scrutiny on the e-commerce company, which is also facing a separate probe in the EU under the bloc’s platform law, the Digital Services Act. Temu, a unit of Chinese-owned PDD Holdings Inc. that’s become hugely popular for flash sales and game-like features in dozens of countries, is one of a string of large tech businesses that the EU has targeted as it scrutinizes powerful platforms.
The EU gave Temu a month to propose solutions to the commission’s consumer protection concerns. If its responses are rejected, national regulators will be able to fine Temu’s revenue in their respective countries. The fines would depend on national law.
©2024 Bloomberg L.P.