EU says Temu in breach of rules to prevent sale of illegal products

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BRUSSELS (Reuters) -The European Commission on Monday said Chinese online marketplace Temu was breaking EU rules by not doing enough to prevent the sale of illegal products through its platform.

The EU’s findings could ultimately lead to a fine of up to 6% of Temu’s annual global turnover, the Commission said.

“Evidence showed that there is a high risk for consumers in the EU to encounter illegal products on the platform,” it said in a statement about Temu.

“Specifically, the analysis of a mystery shopping exercise found that consumers shopping on Temu are very likely to find non-compliant products among the offer, such as baby toys and small electronics.”

The Commission said Temu’s risk assessment was inadequate as it was based on general industry information, not on the specifics of its platform.

It said that if the Commission’s preliminary findings were ultimately confirmed, Temu would be found in breach of the Digital Services Act.

“Such a decision could entail fines of up to 6% of the total worldwide annual turnover of the provider and order the provider to take measures to address the breach,” it said.

Temu can respond to the EU’s findings in the coming weeks, an EU spokesperson said, without giving an exact deadline.

A Temu spokesperson said the company would continue to “cooperate fully” with the Commission.

The findings relate only to one aspect of a broader ongoing EU investigation into Temu, the Commission said.

Temu is also suspected of breaching EU rules relating to the use of addictive design features, the transparency of its recommendation systems and its access to data for researchers.

(Reporting by Bart MeijerEditing by Ros Russell)