On November 8, 2024, the European Commission and national consumer authorities have issued a warning to the online marketplace Temu, demanding compliance with EU consumer protection laws. Following a coordinated investigation by the Consumer Protection Cooperation (CPC) Network, Temu was notified of platform practices that may violate EU standards. These practices, the authorities claim, range from misleading consumers to exploiting data, raising pressure on Temu to make changes to align with Europe’s consumer protection and transparency requirements.
Temu's practices under scrutiny
The CPC Network, led by national authorities in Belgium, Germany, and Ireland and supported by the European Commission, highlighted specific concerns, including "fake discounts" that mislead shoppers, “pressure selling” tactics, and “forced gamification” that requires consumers to play a game to access the site. The investigation also found that Temu may provide insufficient information about return policies, order thresholds, and refund options, leaving customers without a clear understanding of their rights.
Transparency issues emerged as another significant concern. The CPC Network cited Temu’s opaque process for verifying reviews, which could allow inauthentic or biased feedback to influence buyers. Additionally, the platform reportedly hides contact details, making it difficult for consumers to reach out with questions or complaints, which is a requirement under EU consumer law.
“The warning from the EU Commission is related to consumer rights,” commented Siri Engesæth, CSO at Factlines. “I would not be surprised if the next warning will be on the working conditions for the people producing Temu goods.”
Regulatory alignment: digital services act and product safety
This CPC action runs parallel to recent proceedings the European Commission opened against Temu under the Digital Services Act (DSA). As a Very Large Online Platform (VLOP), Temu must adhere to strict obligations that include managing systemic risks and ensuring transparency in recommendation algorithms. The DSA investigation complements the CPC Network’s efforts to protect consumer rights in online marketplaces.
From December 13, Temu will face additional responsibilities under the General Product Safety Regulation (GPSR), which mandates that online marketplaces have an EU-based economic operator accountable for product safety. If any unsafe product is identified, authorities will have the power to issue a takedown order, marking another layer of accountability for platforms like Temu.
Consumer protection violations and key laws
The CPC Network’s findings suggest Temu may have violated several EU consumer protection laws, including:
Unfair Commercial Practices Directive: Prohibits deceptive practices like fake discounts and pressure tactics.Consumer Rights Directive: Mandates transparent information about returns, refunds, and order minimums.Price Indication Directive: Requires accuracy in price reductions.e-Commerce Directive and Unfair Contract Terms Directive: Oblige platforms to disclose if a seller is a trader and to avoid vague or one-sided terms.These regulations aim to protect consumers and ensure fair competition in the marketplace. Should Temu fail to address the CPC Network’s concerns, national authorities could impose fines based on the company’s annual revenue within affected EU Member States.
Reinforcing ethical standards in E-commerce
This investigation highlights the EU’s commitment to maintaining a fair and transparent digital marketplace. Companies focusing on human rights and ethical practices within their supply chains should note the regulatory risks associated with Temu’s practices. For businesses aiming to uphold ethical standards, this case serves as a reminder that compliance with EU consumer laws is essential for building and sustaining consumer trust.
Next steps for Temu
Temu now has one month to respond to the CPC Network’s findings and propose corrective measures. If its response is insufficient, authorities may escalate enforcement actions, which could involve fines or other measures to compel compliance. This action underscores the EU’s determination to hold companies accountable for ethical consumer treatment across the supply chain.
Quotes from EU officials
Věra Jourová, Vice-President for Values and Transparency, reinforced the EU’s commitment to consumer protection, calling it a “non-negotiable” priority for the Commission:"Ensuring the safety of consumers in the EU is a priority for the Commission. Therefore, adherence to our consumer protection standards by trading companies is non-negotiable. We urge Temu to promptly bring its practices into full compliance with EU consumer protection rules."
Similarly, Didier Reynders, Commissioner for Justice, emphasized that all market players targeting consumers in the EU must respect EU consumer laws, adding that this is essential for protecting consumers and fostering fair competition.
Ensuring transparency and safety
This action reflects the EU’s commitment to fostering a safe and transparent online marketplace. For Temu, compliance is both a legal requirement and a business necessity, as European regulatory bodies continue to prioritize consumer protection and ethical business practices. This case highlights the importance of transparency, fairness, and respect for consumer rights across digital platforms, reinforcing the EU’s robust stance on ethical responsibility throughout the supply chain.
