EU Hits Temu with €200 Million Fine Over Illegal Products

The European Union has imposed a fine of 200 million euros on the Chinese-owned online shopping platform Temu for allowing the sale of illegal and unsafe products, including hazardous baby toys and defective chargers.

According to EU regulators, the company failed to properly identify and assess the systemic risks posed by illegal items being offered on its platform, leading to significant harm to consumers across the bloc. The regulators stated that European shoppers are highly likely to encounter such banned products on Temu, and the platform severely underestimated how often this occurs.

Temu, which entered the EU market in 2023, has grown rapidly and now boasts over 130 million users in the region. However, it has come under intense scrutiny since October 2024, when the EU launched an investigation. Preliminary findings released in July last year indicated that Temu had violated landmark digital rules concerning the risks of illegal products.

The EU’s technology commissioner noted that Temu’s large market presence means a substantial portion of European consumers are exposed to these dangerous goods. The fine is only the second ever issued under the bloc’s Digital Services Act, following a 120-million-euro penalty against Elon Musk’s X platform in December.

Under the DSA, major digital platforms and online retailers are required to conduct thorough risk assessments to identify potential dangers and implement measures to address them. The EU criticised Temu’s 2024 risk assessment as falling short of required standards. Investigators discovered baby rattles containing chemicals above legal safety limits, chargers that failed basic safety tests, and unsafe jewellery items.

The European Commission also said Temu failed to properly evaluate how its platform design could amplify the spread of illegal products.

While the maximum penalty under the DSA can reach six percent of a company’s global annual turnover Temu’s revenue stood at $61.7 billion last year the EU said the 200-million-euro fine was proportionate given the clear-cut nature of the breaches for the one-year assessment period.

Temu has been ordered to pay the fine and submit a corrective action plan to the EU by August 28. Failure to comply could result in additional periodic penalty payments. The company retains the right to appeal the fine, a step already taken by X in European courts.

The EU is continuing to investigate other suspected violations by Temu, including the use of addictive design features that could harm users’ mental and physical well-being, as well as how the platform recommends content and products.

The fine comes one day before EU executives are scheduled to discuss the bloc’s approach to China, with top officials warning that Europe needs to adopt a tougher stance to defend its economy. Brussels has already stepped up anti-subsidy investigations into Chinese companies investing in Europe. On the same day as the fine, the EU launched an in-depth probe into Chinese e-commerce giant JD.com’s bid for a major German electronics retail group over concerns of state subsidies.