The European Union has imposed a €200 million ($232 million) penalty on Chinese-owned e-commerce platform Temu for failing to prevent the sale of illegal and unsafe products on its marketplace, including hazardous baby toys and faulty electrical chargers.
EU regulators said users across Europe were highly exposed to prohibited items on the platform, noting that Temu “seriously underestimated” the likelihood of consumers encountering such goods. Authorities also accused the company of failing to properly identify, assess, and manage systemic risks linked to illegal product listings and consumer harm within the bloc.
Temu, however, rejected the decision, describing the fine as “disproportionate” and maintaining that it has cooperated with regulators throughout the investigation.
The platform, which entered the European market in 2023, has rapidly grown in popularity, now serving about 130 million users across the EU. Despite its expansion, it has faced increasing scrutiny since October 2024, when the European Commission launched an investigation into possible breaches of the Digital Services Act (DSA). Preliminary findings released in July last year suggested the company had failed to comply with key safety obligations.
EU tech commissioner Henna Virkkunen said Temu’s scale made the issue more serious, as its large user base increased the likelihood of illegal goods reaching consumers.
The fine marks only the second enforcement action under the EU’s Digital Services Act, following a €120 million sanction against Elon Musk’s X platform in December. The DSA requires major digital platforms to carry out risk assessments and implement safeguards against harmful or illegal content and products.
According to the Commission, Temu’s 2024 risk assessment did not meet required standards. Investigators cited the presence of baby products containing unsafe chemical levels, substandard electrical chargers, and questionable jewellery items as evidence of compliance failures. The EU also said the platform did not adequately evaluate how its system design could amplify the spread of illegal products.
Although the bloc could have imposed a heavier penalty—up to six percent of global annual turnover—the Commission said the €200 million fine was proportionate to the specific violations identified.
Temu has been ordered to pay the fine and submit a compliance action plan by August 28, outlining measures to address the breaches. Failure to comply could lead to additional penalties.
The company has stated that it is reviewing the ruling and considering its legal options, while insisting it has already strengthened its safety systems, risk assessments, and user protection policies.
Meanwhile, EU authorities say investigations are still ongoing into other potential violations, including the platform’s product recommendation systems and concerns over addictive design features.
The sanction also comes as the EU intensifies scrutiny of Chinese tech and e-commerce firms, alongside broader discussions on tightening economic measures against Beijing and reviewing foreign subsidies affecting competition within the bloc.