The European Commission has fined Chinese online retailer Temu €200 million for failing to prevent the sale of illegal and dangerous products on its platform, marking the largest penalty ever imposed under the EU's Digital Services Act (DSA). The fine follows a 19-month investigation that found consumers were highly likely to encounter unsafe goods, including baby toys containing toxic chemicals or small detachable parts that pose choking hazards, chargers that failed basic electrical safety tests and risked burns or fire, and clothing and jewellery made with banned substances including lead.
A mystery shopping exercise conducted by an independent testing organisation formed a central part of the investigation, uncovering a "high percentage" of unsafe baby products and a "very high percentage" of dangerous chargers among items available for purchase. Regulators also criticised Temu's website design, finding that its recommender systems and influencer promotions could amplify the spread of illegal products. The commission concluded that Temu's mandatory risk assessment, carried out in 2024, was too general, lacked solid evidence and failed to give regulators or the public an adequate picture of the harm posed by products sold on the platform — a finding it described as "a particularly serious breach" of the DSA.
The DSA, which has applied to the world's largest online platforms since February 2024, requires designated Very Large Online Platforms to rigorously identify and manage systemic risks. Temu, which has around 130 million users in the EU — nearly a third of the bloc's population — was designated under this category in October 2024. The €200 million fine, while the highest yet under the DSA, represents a fraction of the revenues of Temu's parent company, PDD Holdings, which reported global revenues of $54 billion in 2024. Under the DSA, companies can be fined up to 6% of global turnover. The previous record fine under the regulation was €120 million, issued to Elon Musk's X last December over deceptive verification badges and advertising opacity.
Temu said it disagreed with the decision and considered the fine disproportionate, noting that the ruling related to its 2024 risk assessment and did not reflect the current state of its systems. The company said it was "reviewing the decision carefully and considering all available options," including a potential appeal to the Court of Justice of the European Union. Separately, the commission's investigation into Temu is continuing, with further inquiries underway into the sale of illegal products, addictive design features, and researcher access to platform data — areas that could result in additional penalties.
Temu has until 28 August to submit an action plan to the commission setting out how it intends to come into compliance. Why this matters: the case is seen as a test of how effectively Europe can hold large non-EU online marketplaces to account for consumer safety. Consumer groups in the UK, where similar concerns about Temu have been raised, have called on the British government to follow the EU's lead and use new powers under the Product Regulation and Metrology Act to make online marketplaces legally responsible for dangerous products sold on their platforms.