The European Commission has fined the Chinese e-commerce platform Temu, owned by PDD Holdings, €200 million (approximately $232 million) for failing to prevent the sale of illegal and dangerous products on its website. This penalty follows a nearly two-year investigation into the company's lack of compliance with the Digital Services Act, a key piece of legislation designed to curb the excesses of Big Tech.
Regulators found that consumers were very likely to encounter unsafe items, including dangerous baby toys and faulty chargers that did not comply with EU consumer safety rules. The European Commission stated that Temu failed to identify and assess the systemic risks these illegal products posed to consumers, citing inadequate risk assessments. Additionally, the platform's recommendation algorithms were blamed for helping to spread these illegal products.
This marks the first major enforcement case involving a Chinese platform under the EU's online-safety regime and is only the second-ever penalty issued under the Digital Services Act, following a €120 million fine against X in December. Further penalties could follow in the coming months as a result of the investigation.