Fashnopsis:
- EU Cracks Down on Temu: Chinese e-commerce platform Temu faces stricter EU regulations alongside giants like Amazon.
- Aggressive Pricing Triggers Scrutiny: Temu’s rapid European growth sparks EU concerns, prompting requisite compliances.
- Consumer Groups Allege Manipulation: Consumer group BEUC claims Temu’s interfaces manipulate users into spending more.
- Temu Faces DSA Deadline: The platform must comply with stricter DSA regulations by September or risk hefty fines.
- EU Ban a Possibility: Failure to comply with the DSA could lead to significant penalties, including a potential ban on Temu.
EU Classifies Temu as “Very Large Online Platform” Subject to Increased Scrutiny
The European Union (EU) has classified Chinese e-commerce platform Temu as a “Very Large Online Platform” (VLOP) subject to stricter regulations under the Digital Services Act (DSA). This brings Temu in line with major competitors like Amazon and Shein, facing increased scrutiny to protect consumers.
Temu’s Aggressive Pricing Strategy Prompts EU Action
Temu’s rapid European expansion, fueled by aggressive pricing, triggered the EU’s action. This marks the 24th platform designated as a VLOP, requiring them to comply with stricter DSA rules by the end of September.
Consumer Groups Allege Manipulative Tactics by Temu
The decision follows accusations from consumer groups. The European Bureau of Consumers’ Associations (BEUC) raised concerns about Temu’s user interfaces, alleging the use of manipulative tactics (“dark patterns”) to encourage higher spending. These practices potentially violate the DSA’s consumer protection measures.
Temu Faces Potential Fines or EU Ban for DSA Violations
Implemented in February, the DSA mandates online platforms to take stronger measures against illegal content. Non-compliance could result in significant penalties for Temu, including fines up to 6% of global revenue or a potential EU ban.
Image Source: Temu
