EU Commission Delivers Damning Preliminary Findings Against Temu: Platform Fails to Meet Digital Services Act Requirements

The e-commerce giant faces potential fines of up to 6% of global revenue as investigations reveal systematic failures in risk assessment and consumer protection

BRUSSELS — The European Commission delivered a significant blow to Chinese e-commerce platform Temu today, announcing preliminary findings that the company has breached multiple obligations under the Digital Services Act (DSA). The announcement marks a critical escalation in the EU's ongoing scrutiny of Very Large Online Platforms (VLOPs) and their compliance with the bloc's stringent digital regulations.

According to documents released by the Commission, Temu has failed to adequately assess and mitigate risks associated with its platform, potentially exposing European consumers to illegal and unsafe products. The preliminary findings come after months of investigation triggered by the platform's designation as a VLOP in May 2024.

"Our investigation has revealed serious shortcomings in Temu's approach to risk assessment and mitigation," said a Commission spokesperson. "The platform's reliance on generic industry information rather than specific analysis of its own business model has resulted in inadequate protections for European consumers."

A Flawed Risk Assessment at the Core

At the heart of the Commission's findings lies what investigators describe as a fundamentally flawed risk assessment process. According to documents reviewed by this publication, Temu submitted a risk assessment in October 2024 that the Commission has now deemed "inaccurate" and "inadequate."

Rather than conducting a thorough analysis of risks specific to its own marketplace, Temu reportedly relied on generic industry information that failed to address the unique challenges posed by its business model. This approach, according to the Commission, has led to significant gaps in the platform's ability to identify and mitigate risks related to illegal products and unverified traders.

"The preliminary findings indicate a high level of systemic non-compliance," noted one Commission official who spoke on condition of anonymity. "Temu's inability to properly verify traders on its platform represents a serious breach of its obligations under the DSA."

The Commission's investigation employed a variety of methods to assess Temu's compliance, including what officials described as "mystery shopping exercises" where investigators posed as regular consumers to test the platform's safeguards. These exercises reportedly revealed a "high likelihood" of encountering illegal or non-compliant products on the platform.

Dangerous Products Reaching European Consumers

The investigation has uncovered numerous examples of potentially dangerous products available for purchase on Temu's platform. Of particular concern are children's toys and electronic devices that fail to meet EU safety standards.

The European Consumer Organisation (BEUC), which has conducted independent testing of products purchased from Temu, reported finding toxic chemicals in baby toys and serious electrical safety risks in various electronic products.

"Our testing revealed alarming levels of toxic materials in products marketed for infants and young children," said a BEUC representative. "These findings demonstrate the real-world consequences of inadequate risk assessment and verification procedures."

In one particularly troubling example, independent testing found that a popular electronic toy for babies contained lead levels significantly exceeding EU safety limits. The product remained available for purchase despite previous complaints and reports.

The Commission's findings suggest that Temu's systems for preventing previously suspended traders from returning to the platform are ineffective, allowing sellers of dangerous or illegal products to continue operating under new identities.

Beyond Safety: Addictive Design and Dark Patterns

The Commission's investigation has extended beyond product safety concerns to examine other aspects of Temu's business practices. Of particular interest are features that investigators believe may exploit psychological vulnerabilities to drive impulsive purchasing behavior.

Temu's gamification elements, including games offering prizes and discounts, have come under scrutiny for potentially promoting addictive shopping behaviors. These features, which reward users for spending time on the platform and making purchases, bear similarities to techniques used in gambling applications, according to several experts consulted during the investigation.

"The platform appears designed to maximize engagement through psychological triggers that may lead to unhealthy consumer behavior," said a digital ethics researcher familiar with the investigation. "These gamification elements raise serious questions about the platform's compliance with DSA provisions regarding dark patterns."

The Commission has also raised concerns about Temu's recommendation algorithms and the lack of transparency regarding how products are promoted to users. This opacity could potentially mask manipulative practices that influence consumer choices in ways that benefit the platform at the expense of informed decision-making.

Research Access Limitations

Another significant finding in the Commission's report concerns Temu's approach to data access for researchers. Under Article 40 of the DSA, VLOPs are required to provide reasonable access to platform data for researchers studying systemic risks.

According to the preliminary findings, Temu has failed to meet this obligation, limiting the ability of independent researchers to study potential harms associated with the platform. This lack of transparency has complicated efforts to fully understand the extent of the issues identified by the Commission.

"Without adequate access to platform data, researchers cannot properly assess the effectiveness of Temu's risk mitigation measures or identify emerging threats to consumer safety," explained a digital rights advocate involved in monitoring DSA compliance. "This opacity undermines the entire regulatory framework."

A Broader Regulatory Context

The action against Temu represents part of a wider European strategy to bring digital platforms under more effective regulatory control. The DSA, which came into full effect for VLOPs in 2023, establishes a comprehensive framework for platform accountability, with particular emphasis on risk assessment and mitigation.

Temu was designated as a VLOP on May 31, 2024, bringing it under the enhanced obligations of the DSA. This designation applies to platforms with more than 45 million monthly active users in the EU, subjecting them to more stringent requirements regarding transparency, content moderation, and risk management.

The case against Temu also intersects with broader EU consumer protection laws and market regulations. The platform's practices potentially violate provisions of the General Product Safety Regulation (GPSR) and various consumer rights directives that apply across the single market.

"This investigation demonstrates the complementary nature of the DSA and existing consumer protection frameworks," noted a consumer rights lawyer specializing in digital markets. "The Commission is increasingly taking a holistic approach to platform regulation that addresses both digital-specific issues and traditional consumer safety concerns."

Not Alone: Other Platforms Under Scrutiny

Temu is not the only e-commerce platform facing regulatory scrutiny in the EU. Sources familiar with the Commission's work indicate that similar investigations are ongoing into other platforms, including some of Temu's direct competitors.

These parallel investigations suggest a systematic approach by European regulators to address what they perceive as structural problems in the fast-growing cross-border e-commerce sector, particularly platforms operating with dropshipping models that connect European consumers directly with manufacturers in Asia.

"The Commission appears to be sending a clear message that the era of light-touch regulation for digital platforms is over," said a Brussels-based regulatory affairs consultant. "These actions against Temu and other platforms demonstrate a new willingness to use the full force of the DSA to protect European consumers."

Potential Consequences and Next Steps

The preliminary findings announced today mark the beginning of what could be a costly process for Temu. Under the DSA, platforms found in breach of their obligations can face fines of up to 6% of their global annual revenue – a potentially enormous sum for a company of Temu's size.

Beyond financial penalties, the Commission has the power to require specific remedial actions, including changes to business practices, enhanced monitoring obligations, and even temporary restrictions on certain services if necessary to protect consumers.

Temu now has the opportunity to respond to the preliminary findings before the Commission makes a final determination. According to the procedural timeline outlined in Commission documents, the company has 30 days to submit a formal response and propose remedial measures.

In a brief statement released following the Commission's announcement, Temu said it was "reviewing the preliminary findings and remains committed to complying with all applicable regulations in the markets where we operate." The company indicated it would work with European authorities to address the concerns raised in the investigation.

However, sources close to the investigation suggest that addressing the identified issues will require fundamental changes to Temu's business practices rather than superficial adjustments. The company's approach to trader verification, product safety checks, and risk assessment methodologies may need complete overhauls to meet EU standards.

A Timeline of Escalating Scrutiny

The current proceedings against Temu represent the culmination of months of increasing regulatory attention. Following its VLOP designation in May 2024, Temu was required to submit its first risk assessment in October 2024. The inadequacies in this assessment prompted further investigation by the Commission.

In parallel, consumer protection organizations across Europe began conducting independent testing of products purchased from the platform, with results shared with national authorities and the Commission. These tests, which revealed numerous safety issues, added momentum to the formal investigation.

The Commission officially opened proceedings against Temu in early 2025, focusing initially on the platform's approach to risk assessment and mitigation. As the investigation progressed, its scope expanded to include concerns about trader verification, product safety, and potentially harmful design features.

Today's preliminary findings represent a significant milestone in this process, but not its conclusion. The final decision, expected later this year, will determine whether these preliminary assessments are confirmed and what remedies will be required.

Broader Implications for Digital Markets

The action against Temu carries implications that extend far beyond a single company. It signals the EU's determination to enforce its digital regulations vigorously, even against platforms headquartered outside the bloc.

For the rapidly growing sector of cross-border e-commerce platforms connecting European consumers directly with Asian manufacturers, the message is clear: operating in the European market requires full compliance with European rules, regardless of where a company is based.

"This case demonstrates that the EU's regulatory reach extends globally when it comes to protecting European consumers," explained a professor of international business law at a leading European university. "Platforms cannot simply operate as passive intermediaries while disclaiming responsibility for the products sold through their services."

The case also highlights the increasing convergence of digital regulation and consumer protection frameworks. While the DSA provides the primary legal basis for the current proceedings, the underlying concerns touch on fundamental principles of product safety, fair trading practices, and consumer rights that transcend the digital context.

Consumer Awareness and Market Response

As news of the Commission's findings spreads, consumer awareness of the potential risks associated with purchasing from Temu may increase. Consumer protection organizations are already using the case to highlight the importance of caution when shopping on cross-border e-commerce platforms.

"European consumers should be aware that not all online marketplaces offer the same level of protection," advised a spokesperson for a national consumer rights organization. "The Commission's findings regarding Temu should serve as a reminder to exercise due diligence before making purchases, particularly for products intended for vulnerable users like children."

Market analysts suggest that the regulatory action could potentially benefit competing platforms that have invested more heavily in compliance and safety measures. European alternatives, in particular, may emphasize their adherence to EU standards as a competitive advantage.

"We're likely to see a period of adjustment in the market as platforms reassess their compliance strategies," predicted a retail industry analyst. "Those that have treated regulatory compliance as an afterthought may find themselves at a significant disadvantage as enforcement intensifies."

Looking Ahead: A Turning Point for Platform Regulation

As the process against Temu continues to unfold, it represents a critical test case for the EU's digital regulatory framework. The outcome will likely influence how other platforms approach compliance with the DSA and related regulations.

For European regulators, the case demonstrates both the power and the complexity of the new digital rulebook. The multi-faceted investigation into Temu touches on numerous aspects of the platform's operations, from technical systems for trader verification to psychological elements of user interface design.

This comprehensive approach reflects the EU's ambition to address not just individual instances of harmful content or products, but the structural features of digital platforms that may systematically generate risks for users.

"What we're seeing is the emergence of a distinctly European approach to platform governance," concluded a digital policy researcher. "Rather than focusing narrowly on content moderation, the EU is developing a model that considers the entire ecosystem of a platform and its potential impacts on consumers, markets, and society."

As Temu prepares its response to the preliminary findings, the case stands as a landmark moment in the evolution of digital regulation – one that may reshape the relationship between global e-commerce platforms and the European market for years to come.