EU Slaps Temu with Record €200 Million Fine Under Digital Services Act for Failing to Curb Illegal and Dangerous Products
The European Commission has imposed a €200 million penalty on Chinese e-commerce platform Temu, the largest fine ever under the Digital Services Act, after investigators found a systemic failure to prevent the sale of hazardous items like toxic baby toys and unsafe chargers.
The European Union has levied a landmark €200 million fine against the Chinese online marketplace Temu for violating the Digital Services Act (DSA). The penalty, announced on Thursday, marks the most significant enforcement action under the bloc's flagship tech regulation, surpassing the €120 million fine imposed on Elon Musk's social network X last year.
Systemic Failures in Risk Assessment
The European Commission concluded that Temu failed to properly identify, analyze, and assess the systemic risks posed by illegal products on its platform. Henna Virkkunen, the EU Commission Vice-President for Tech Sovereignty, stated that Temu's risk assessment underestimated concrete dangers, was too unspecific, and did not rely on solid evidence. The Commission found the company's mandatory annual risk report to be inadequate, relying on general industry data rather than the specific conditions on its own platform.
Temu's risk assessment underestimates concrete risks, is too unspecific, does not rely on solid evidence, and is not comprehensive.
Alarming Results from Mystery Shopping
To build its case, Brussels commissioned an independent contractor to conduct incognito purchases, followed by laboratory tests on randomly selected items. The findings were stark. A very high percentage of selected chargers failed basic safety tests, posing risks of overheating, fire, or electrocution. A high percentage of tested baby toys presented medium to high safety risks, either containing chemical substances exceeding legal limits or featuring detachable parts that created choking hazards. Jewelry containing unauthorized chemical substances was also flagged. These results were corroborated by customs controls from member states and the European market surveillance database.
- Chargers
- 85 % of tested items
- Baby Toys
- 75 % of tested items
- Jewelry
- 60 % of tested items
Temu's Defense and Obligations
Temu, which boasts between 92 and 130 million users in the EU depending on the source, called the fine "disproportionate" and argued that the decision reflects its 2024 risk assessment and not the current state of its systems. The company stated it respects the need for clear rules but is carefully studying the decision and keeping all options open. Beyond the fine, Temu must submit a corrective action plan by August 28, 2026. Failure to comply could result in additional daily, weekly, or monthly penalties.
We disagree with the European Commission's decision and believe the fine is disproportionate. The decision refers to 2024 and does not reflect the current state.
Broader Investigation Continues
The €200 million penalty, which represents less than 1% of parent company PDD Holdings' annual revenue of €53 billion, is only the first chapter of the EU's probe. The Commission is still investigating the actual sale of illegal products, as well as the potentially "addictive design" of the platform aimed at capturing consumers. Czech trade association president Tomáš Prouza welcomed the fine but insisted that national authorities, such as the Czech Trade Inspection, must now also take action to enforce the rules.
- EU Commission opens formal investigation into Temu.
- Preliminary investigation concludes Temu breached key DSA rules.
- Commission imposes €200 million fine and demands corrective action plan.
- Deadline for Temu to submit its corrective action plan.
