The European Commission has fined Temu €200 million after confirming that the company “failed to diligently identify, analyze, and assess the systemic risks of illegal products offered on its platform and the resulting harm to consumers in the European Union.” A revealing mystery shopping experience To conduct the investigation, the Commission carried out mystery shopping, making purchases on the platform to verify its compliance with the Digital Services Act (DSA). The conclusion? That it is “highly likely that EU consumers will find illegal items on Temu.” Specifically, in its statement, the Commission emphasizes that Temu’s 2024 risk assessment does not comply with the DSA because it is based on general information about risks related to the e-commerce sector as a whole, rather than on specific tests of its own platform. The European body explains that the failure to carry out adequate risk assessments constitutes a particularly serious infringement of the Digital Services Act. The statement suggests that Temu underestimated how frequently EU consumers are likely to encounter illegal products. In fact, during the mystery shopping process, Commission investigators detected violations in everyday products, but also in some that are particularly sensitive for their target audience. Specifically, the statement asserts that a very high percentage of the selected chargers failed basic safety tests, while a high percentage of the baby toys tested posed medium to high safety risks. In the latter case, the European body's concern centers on the presence of chemical substances exceeding legal safety limits and the risk of suffocation due to the presence of detachable parts. Finally, it focuses on influencers and their relationship with affiliate campaigns on the platform, which could amplify the risks of spreading illegal products. Temu now has until August 28th of this year to present a detailed action plan to remedy these deficiencies, under threat of further fines if it fails to comply with European safety requirements. A giant under scrutiny This isn't the first time we've reported on the legal problems Temu faces in the European Union, which have had local ramifications. For example, in France, the Council of Commerce and the Confederation of Commerce joined forces to combat what they considered unfair competition from Chinese marketplaces like Temu and Shein, arguing that the vast majority of products sold by these platforms do not comply with current EU regulations and that up to 66% of the products analyzed have been classified as potentially dangerous. In any case, to be fair, it's important to emphasize that the investigation the European Commission is referring to took place in 2024. Since then, Temu has continued to evolve, and this is likely one of its strengths in defending its current position. In fact, earlier this year we reported on how it announced it would double its investment in compliance, security, and quality control systems, while already under intense scrutiny from the Brussels authorities. Temu's importance in the European and global eCommerce ecosystem has grown significantly during this time. In fact, month after month, it's one of the most downloaded apps in Spain and the world (certainly the most downloaded shopping app), and its website now ranks second among the most visited online shopping sites globally. Now, with the ambitious customs reform about to come into effect, which from July of this year will impose a customs tariff of 3 euros on all e-commerce shipments valued below 150 euros that are sent directly to EU consumers from third countries, the legal environment becomes more uncertain for Temu.