Chinese e-commerce platform, Temu, has been issued a €200 million ($232 million) penalty by European Union digital regulators after being found insufficient in its efforts to prevent the circulation of illegal goods, officials announced on Thursday.
The fine follows the initial outcome of a broader investigation into the company’s compliance with EU digital rules.
The action forms part of an extensive probe under the Digital Services Act (DSA), a regulatory framework requiring major online platforms to take stronger responsibility for illegal and harmful content.
Authorities indicated that further sanctions could still be imposed in the coming months as the investigation continues.
The European Commission launched its inquiry into Temu after receiving complaints from the pan-European consumer group BEUC and 17 of its national affiliates. According to the Commission, the company did not adequately “diligently identify, analyse, and assess the systemic risks of illegal products sold on its platform and the resulting harm to consumers in the European Union.” Regulators also raised concerns that Temu failed to properly evaluate how its recommendation algorithms and influencer-driven promotions may have increased exposure to unlawful listings.
Responding to the decision, Temu stated: “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,” the company said. It added that the ruling was based on its early compliance assessment from 2024 and “does not reflect the current state of our systems,” noting that improvements have since been made in risk management, governance, and user protection. Temu also confirmed it would continue engaging with regulators while reviewing possible next steps.
The European Commission has given the company until August 28 to submit an action plan, which will then be reviewed to determine whether it meets DSA requirements. A final decision on compliance is expected within two months after submission. EU technology commissioner Henna Virkkunen emphasised the importance of the ruling, stating, “This is about risk management. It is very much a cornerstone of our DSA,” and added, “With this decision we are sending a very strong message to Temu.”
Investigators will also continue examining whether Temu’s platform design encourages addictive behaviour, alongside ongoing scrutiny of its role in the sale of illegal products and the transparency of its recommendation systems and data access policies.
Under the Digital Services Act, companies can face penalties of up to 6% of their global annual revenue for violations. This marks the second enforcement action under the law, following a €120 million fine imposed on Elon Musk’s social media platform X in December.
