EU's Strict Security Laws Pose Challenge for China's Temu

EU strengthens its control with the Digital Services Act (DSA) over China’s e-commerce platform, Temu.

After European consumer protection groups lodged joint complaints alleging violations of DSA by Temu, Temu managed to reach a user base of 75 million and went on to surpass it in the EU, surpassing the EU's 45 million mark for being designated as a very large online platform (VLOP). Two weeks after complaining, Temu started facing stricter scrutiny by the European Union.

Temu acknowledges the European Commission’s designation of our platform as a Very Large Online Platform (VLOP) under the Digital Services Act (DSA),” a Temu spokesperson stated.

This implies that by September 2024, Temu will be obligated to adhere to the DSA's rigorous regulations and duties, which encompass evaluating and reducing "systemic risks."

Temu will undergo a heightened examination of its operations related to algorithms, artificial intelligence, content ranking, and recommendations, as it is the 24th company to encounter strict obligations under the DSA. This will evaluate and minimize any "systemic risks" associated with Temu's offerings, which involve tackling the presence of counterfeit, unlawful, or hazardous items on its e-commerce shopping platform.

A couple of years ago Temu made an entry into the international market by providing affordable goods ranging from clothing to household goods and has quickly gained recognition.

“Temu must put in place mitigation measures to address risks, such as the listing and sale of counterfeit goods, unsafe products, and items that infringe on intellectual property rights,” the European Commission, the 27 nation bloc’s executive arm, stated in a press release.

Furthermore, Temu spokesperson stated "We are fully committed to adhering to the rules and regulations outlined by the DSA to ensure the safety, transparency, and protection of our users within the European Union."

Under the Digital Services Act, China’s online shopping platform Temu is required to work with the Commission and the Irish Digital Services Coordinator. The European headquarters of Temu needs to provide assessment reports on risks initially at the beginning and then annually after that.

The commission said the company could do this by taking measures such as modifying its user interface to report better and detect suspicious listings, improving its moderation processes to remove illegal items swiftly, and refining its algorithms to prevent the promotion and sale of prohibited goods.

Temu is an online shopping platform run by the Chinese online retail firm Pinduoduo. It offers affordable items to customers.