Commission opens formal proceedings against Temu under the Digital Services Act

This article is brought to you in association with the European Commission.

Today, the Commission has opened formal proceedings to assess whether Temu may have breached the Digital Services Act (DSA) in areas linked to the sale of illegal products, the potentially addictive design of the service, the systems used to recommend purchases to users, as well as data access for researchers.

Today’s decision follows preliminary analyses of the risk assessment report provided by Temu at the end of September 2024, the replies to the Commission’s formal requests for information on 28 June 2024 and 11 October 2024, as well as of information shared by third parties. The Commission also relied on information shared through the cooperation mechanism with national authorities under the European Board of Digital Services Coordinators, in particular with the Irish Digital Services Coordinator.

More specifically, the investigation will focus on the following areas:

• The systems Temu has in place to limit the sale of non-compliant products in the European Union. Among others, it concerns systems designed to limit the reappearance of previously suspended rogue traders, known to have been selling non-compliant products in the past, as well as systems to limit the reappearance of non-compliant goods.
• The risks linked to the addictive design of the service, including game-like reward programmes, and the systems Temu has in place to mitigate the risks stemming from such addictive design, which could have negative consequences to a person’s physical and mental well-being.
• The compliance with the DSA obligations linked to how Temu recommends content and products to users. This includes the requirement to disclose the main parameters used in Temu’s recommender systems and to provide users with at least one easily accessible option that is not based on profiling.
• The compliance with the DSA obligation to give researchers access to Temu’s publicly accessible data.

Temu would face liability under the DSA if the Commission’s suspicions were proven correct, as these shortcomings would constitute infringements of Articles 27, 34, 35, 38 and 40 of the DSA. The Commission will now carry out an in-depth investigation as a matter of priority. The opening of formal proceedings does not prejudge the outcome.

Next steps

After the formal opening of proceedings, the Commission will continue to gather evidence, for example by sending additional requests for information to Temu or third parties or conducting monitoring actions or interviews.

The opening of formal proceedings empowers the Commission to take further enforcement steps, including the adoption of a non-compliance decision. The Commission is also empowered to accept commitments made by Temu to remedy the matters subject to the proceeding.

The DSA does not set any legal deadline for bringing formal proceedings to an end. The duration of an in-depth investigation depends on several factors, including the complexity of the case, the extent to which the company concerned cooperates with the Commission and the exercise of the rights of defence.

Moreover, the opening of formal proceedings does not prejudge its outcome or any other proceedings that the Commission may decide to initiate under other articles of the DSA.

Likewise, it does not preclude any prospective enforcement actions which may be taken by national consumer protection authorities of the Consumer Protection Cooperation (CPC) Network regarding Temu’s compliance with its obligations under Union consumer law. The Commission will continue its efforts to cooperate with national authorities when enforcing the DSA, including through the dedicated working group on Consumers and online marketplaces of the European Board of Digital Services Coordinators.

Similarly, the opening of formal proceedings also does not preclude actions and decisions that may be taken by market surveillance authorities on the basis the General Product Safety Directive (General Product Safety Regulation as of 13/12/2024).

Background

Temu was designated as a Very Large Online Platform (VLOP) on 31 May 2024 under the EU’s Digital Services Act, following its declaration of having more than 45 million monthly active users in the EU. Four months from its designation, Temu had to comply with the most stringent obligations applicable to VLOPs, as set out in the DSA. These include the obligation to duly assess and mitigate any systemic risks stemming from its service. Temu last declared 92 million monthly users in September 2024.

For more information

EU Official Journal text on the DSA 

Very large online platforms and search engines under the DSA 

The enforcement framework under the Digital Services Act

Digital Services Act – Questions and Answers

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