EU Fines Temu €200 Million for Failing to Adequately Manage Risks Related to Illegal Products

On May 28, EU technology regulators announced a €200 million (approximately US$232 million) fine against Chinese e-commerce platform Temu following a nearly two-year investigation conducted under the Digital Services Act (DSA).

The investigation was launched after complaints were filed by the European Consumer Organisation (BEUC) and 17 of its member organisations. According to the European Commission, Temu failed to adequately identify, analyse and assess the systemic risks arising from the sale of illegal products on its platform, as well as the resulting harm to consumers within the European Union.

The Commission also criticised Temu for failing to properly assess the impact of its recommender systems and product promotion programmes involving social media influencers, which could increase the risk of illegal products being promoted and sold.

Adopted by the European Union in 2022 and fully applicable since 2024, the Digital Services Act (DSA) is one of the EU’s key legal frameworks governing digital platforms. The legislation requires online platforms, particularly very large online platforms, to identify, assess and mitigate risks arising from their operations, including the dissemination of illegal content, the sale of illegal products and other harms to consumers. Unlike traditional approaches that primarily focus on individual violations, the DSA places significant emphasis on the risk-management responsibilities of digital platforms.

In response to the decision, Temu stated that it respects the objectives of the DSA but disagrees with the European Commission’s findings and considers the fine disproportionate. The company argued that the decision is based on its initial DSA assessment conducted in 2024 and does not reflect the current state of its platform governance, risk-assessment mechanisms and user-protection systems, which it says have since been strengthened.

The European Commission has instructed Temu to submit an action plan by August 28 demonstrating how it intends to comply with the DSA. Henna Virkkunen, the EU’s technology chief, stated that risk management is a cornerstone of the DSA and that the decision sends a strong message to the company.

The EU will also continue investigating several other issues relating to Temu, including whether aspects of the platform’s design may be addictive, issues concerning illegal products on the platform, and access to data for researchers.

Under the DSA, companies can be fined up to 6% of their global annual turnover for violations. Before Temu, Elon Musk’s social media platform X was fined €120 million by the EU in December last year. The case highlights the growing role of the DSA in regulating digital platforms and strengthening accountability for risks arising from their operations.