Temu fined €200m by EU over illegal and unsafe products sold online

Temu, a Chinese online marketplace, which has its EU headquarters in Dublin, offers heavily discounted products from third-party sellers. (AP Photo/Richard Drew)

Large online retailer Temu has been hit with a €200m fine by the European Commission over the sale of illegal products on its platform and the “resulting harm” caused across Europe.

The Chinese online marketplace, which has its EU headquarters in Dublin, offers heavily discounted products from third-party sellers. However, the European Commission said evidence at its disposal suggests that consumers in the EU are “very likely to encounter illegal items on Temu”.

The products identified include unsafe baby toys containing chemicals above legal safety limits and items posing suffocation risks. The commission said the fine reflects the “serious infringement” of EU laws.

“The company failed to diligently identify, analyse, and assess the systemic risks of illegal products being offered on its platform and the resulting harm to consumers in the European Union,” the commission said.

It added that Temu’s 2024 risk assessment fell short of the standards set out under the EU’s landmark Digital Services Act (DSA), under which the company has now been fined.

Under the legislation, designated platforms such as Temu — classified as very large online platforms — must diligently assess systemic risks linked to their services and take appropriate mitigation measures.

“It is based on general information about risks concerning the eCommerce sector as a whole, rather than on specific evidence about Temu’s own service, including public reports and testing,” the commission said.

“It seriously underestimated how often EU consumers are likely to encounter illegal items. Evidence from a mystery shopping exercise included in the Commission’s investigation shows that a very high percentage of the selected chargers failed basic safety tests, while a high percentage of tested baby toys posed safety risks of medium to high severity, as they contain chemicals exceeding legal safety limits or pose suffocation hazards due to detachable parts.” 

The commission also said Temu failed to properly assess how the design of its platform — including recommender systems and products promoted by affiliated influencers — could amplify the spread of illegal products.

The European Commission has given Temu until August 28 to submit a plan outlining remedies for the breaches. Failure to comply could lead to further penalty payments.

“Risk assessments are not box-ticking exercises — they are the backbone of the DSA,” said Henna Virkkunen, the European Commission executive vice-president for tech sovereignty, security and democracy.

“Temu’s risk assessment underestimates concrete risks, lacks specificity, is not grounded in solid evidence, and is not comprehensive. It leaves regulators, users, and the public in the dark about the true scale of potential harm posed by illegal products sold on Temu. Now it is time for Temu to comply with the law.” 

This is the second major fine issued by the European Commission for breaches of the Digital Services Act. Last year, X was fined €120m, prompting a furious response from owner Elon Musk.

Under the legislation, fines can reach up to 6% of a company’s global turnover. In Ireland, regulator Coimisiún na Meán has also launched several investigations into major firms based here under the provisions of the DSA.

A spokesperson for Temu said: "Temu respects the objectives of the Digital Services Act and the need for clear, consistent rules across the digital economy. However, we disagree with the European Commission's decision and consider the fine to be disproportionate. 

"The decision relates to our first DSA assessment in 2024 and does not reflect the current state of our systems. Temu engaged constructively with the Commission throughout the process and has since taken further steps to strengthen risk assessment, platform governance, and user protection. 

"We will continue to engage with regulators in good faith and work toward a marketplace that serves consumers, businesses, and communities responsibly. We are reviewing the decision carefully and considering all available options."