Temu hit with $232 million fine by EU over illegal product sales

Temu has been charged with a hefty fine by EU regulators over illegal products.

The Chinese online retailer has been fined €200 million ($232 million) for not doing enough to stop the sale of illegal products, European Union tech regulators said on Thursday, ‌following the first part of a wide investigation.

EU regulators investigated Temu following complaints by the pan-European consumer organization BEUC and 17 of its national members.

Further penalties could follow in the coming months as a result of a nearly two-year investigation under the Digital Services Act that requires large online companies to do more to tackle illegal and harmful content on their platforms.

The European Commission, the EU executive, said the company failed to diligently identify, analyze, and assess the systemic risks of illegal products sold on its platform and the resulting harm to consumers in the European Union.

It criticized Temu for not properly assessing how its recommender systems and product promotion programs by affiliated influencers could amplify the risks of sales of illegal products.

"Temu respects the objectives of the Digital Services Act and the need for clear, consistent rules across the digital economy. However, we disagree with the European Commission’s decision and consider the fine to be disproportionate," said Temu in a statement.

The Commission gave Temu until August 28 to deliver an action plan that regulators will assess, with a decision on whether the company has done enough to comply with the DSA due in two months' time.

"This is about risk management. It is very much a cornerstone of our DSA," EU tech chief Henna Virkkunen told reporters. "With this decision we are sending a very strong message to Temu."