EU urges e-commerce platform Temu to respect consumer protection laws

Brussels, 8 November 2024

Today, following a coordinated investigation at European level, the Consumer Protection Cooperation (CPC) Network of national consumer authorities and the European Commission notified the online marketplace Temu of a number of practices on its platform that infringe EU consumer law. The CPC Network directed Temu to bring those practices in line with consumer laws of the European Union. Temu remains under investigation and was requested to provide further information to the network. The CPC Network’s action against Temu is led by the competent national authorities of Belgium (Directorate General for Economic Inspection), Germany (Federal Environment Agency) and Ireland (Competition and Consumer Protection Commission), under the coordination of the European Commission.

The CPC Network’s coordinated investigation covers a broad range of practices with which consumers are confronted while shopping on Temu, including such that may mislead consumers or unduly influence their purchasing decisions. The CPC Network is also investigating whether Temu complies with specific information obligations for online marketplaces under consumer law.

Last week, the Commission opened formal proceedings against Temu under the Digital Services Act (DSA). The DSA proceedings and the CPC Network’s joint enforcement action are complementary to each other. They aim at ensuring a safe and trustworthy online environment where the rights of consumers in Europe are fully protected.

From 13 December onwards, the General Product Safety Regulation (GPSR) will require that there is an economic operator established in the EU who is responsible to ensure compliance with product safety requirements, including specific obligations to online marketplaces that target consumers. Under the GPSR, the national market surveillance authorities can issue a takedown order to take the product off the internet should they identify that it is unsafe. These obligations are complementary to the DSA.

Key elements of the CPC Network’s coordinated action

The CPC Network identified several types of problematic practices on Temu, which they consider to be in breach of EU consumer protection laws, such as:

• Fake discounts: Giving the false impression that products are offered with a discount where there is none.
• Pressure selling: Putting consumers under pressure to complete purchases using tactics like false claims about limited supplies or false purchase deadlines.
• Forced gamification: Forcing consumers to play a ‘spin the fortune wheel’ game to access the online marketplace, while hiding essential information about the conditions of use linked to the rewards of the game.
• Missing and misleading information: Displaying incomplete and incorrect information about consumers’ legal rights to return goods and receive refunds. Temu also fails to inform consumers in advance that their order needs to reach a certain minimum value before they can complete their purchase.
• Fake reviews: Giving inadequate information about how Temu ensures the authenticity of reviews published on its website. National authorities found reviews which they suspect to be unauthentic.
• Hidden contact details: Consumers cannot easily contact Temu for questions or complaints.

In addition, the CPC Network requested information from Temu to assess the company’s compliance with further obligations under EU consumer law, such as the obligation to inform consumers clearly whether the seller of a product is a trader or not; to ensure that product rankings, reviews, and ratings are not presented to consumers in a misleading manner; to ensure that price reductions are announced and calculated correctly; and to ensure that any environmental claims are accurate and substantiated.

Next steps

Temu now has one month to reply to the CPC Network’s findings and propose commitments on how they will address the identified consumer law issues. Depending on Temu’s reply, the CPC Network may enter a dialogue with the company. If Temu fails to address the concerns raised by the CPC Network, national authorities can take enforcement measures to ensure compliance. This includes the possibility to impose fines based on Temu’s annual turnover in the Member States concerned. This is without prejudice to the power of national authorities to take enforcement measures in ongoing proceedings.

Background information

Under the Consumer Protection Cooperation (CPC) Regulation, the national consumer authorities of the 27 EU Member States, Norway and Iceland form together the CPC Network to investigate and enforce EU consumer protection laws against cross-border infringements. The European Commission facilitates, and under certain circumstances also coordinates, such joint investigation and enforcement actions.

The consumer law obligations that the CPC Network is invoking vis-à-vis Temu can be found in the Unfair Commercial Practices Directive, the Consumer Rights Directive, the Price Indication Directive, the e-Commerce Directive and the Unfair Contract Terms Directive.

Temu was designated as a Very Large Online Platform (VLOP) on 31 May 2024 under the Digital Services Act (DSA). Four months from its designation, Temu had to comply with the most stringent obligations applicable to VLOPs. These include the obligation to duly assess and mitigate any systemic risks stemming from its services. Following a preliminary investigation, the Commission opened on 31 October 2024 formal proceedings to assess whether Temu may have breached the DSA in areas linked to the assessment, management, and mitigation of risks, to the transparency of recommender systems and to data access for researchers.

The CPC Network’s coordinated action against Temu is without prejudice to ongoing proceedings by national authorities. National proceedings into Temu’s commercial practices have been announced so far by the Hungarian Competition Authority, the Polish Office of Competition and Consumer Protection, and the Directorate General for Competition Policy, Consumer Affairs and Fraud Control in France. Similarly, the coordinated action is without prejudice to proceedings that the European Commission has initiated under the DSA or may decide to initiate in the future. Furthermore, the coordinated action does not preclude any ongoing or future enforcement actions by market surveillance authorities under product safety laws.

More Information

• Consumer Protection Cooperation (CPC) Network
• Coordinated actions of the CPC Network
• Consumer Protection Cooperation Regulation

Quote(s)

Ensuring safety of consumers in the EU is a priority for the Commission. Therefore, adherence to our consumer protection standards by the trading companies is non-negotiable. The dedication and coordinated efforts of national authorities play a vital role in ensuring a fair and secure market for everyone. We have shared today our concerns with Temu and we urge Temu to promptly bring its practices into full compliance with EU consumer protection rules.

^{Věra Jourová, Vice-President for Values and Transparency}

All market players targeting consumers in the Single Market must respect EU consumer laws, no matter if they are established within or outside the Union. This is key to protect consumers in a meaningful way and ensure fair competition. I commend national authorities for their coordinated action. Temu must now take EU rules seriously and bring its practices into full compliance with EU consumer laws.

^{Didier Reynders, Commissioner for Justice}

Source – EU Commission

BEUC: Taming Temu