EU Commission demands information from Temu and Shein on illegal products, user protections

2 months ago 17

The European Commission formally requested information on Friday (28 June) from online marketplaces Temu and Shein on measures taken to comply with online safety regulation Digital Services Act (DSA).

Temu and Shein were designated Very Large Online Platforms under the DSA, in May and April, respectively. As a result, they are under the Commission’s supervision and have to follow strict rules or risk fines.

The Commission is asking for information on the platforms’ mechanisms through which users can flag illegal products, online interfaces which should not manipulate users, as well as minors protection, transparency of recommender systems, traceability of sellers, and compliance by design, according to its press release.

Temu and Shein are required to respond by 12 July.

A Shein spokesperson confirmed to Euractiv that the company had received the request for information, and said they will work with the executive to ensure compliance.

Temu also told Euractiv that they will cooperate with the EU and are “fully committed to complying with all applicable laws and regulations in the markets” where they operate.

The DSA, in force since 17 February, aims to create a safer digital environment by clarifying the assignment of responsibility for actors operating online, including how to deal with illegal content.

The Commission’s request is based on a complaint submitted in May by the European Consumer Organisation (BEUC), an umbrella group for 44 independent consumer organisations, against Temu for potential DSA breaches.

According to the DSA, platforms with more than 45 million users, entail a “systemic risk” for society and must follow a specific regime of content moderation.

After their VLOP designation, Temu and Shein have four months to comply with stricter DSA rules, including assessing and mitigating systemic risks such as the spread of unsafe and counterfeit products.

Temu is a Chinese e-commerce company whose parent is PDD Holdings, while Shein is Chinese-founded but based in Singapore.

Next steps

After the 12 July deadline, the Commission will evaluate their replies to determine if further proceedings are necessary. It may impose fines for providing incorrect or incomplete information and could issue periodic penalty payments for non-compliance with the request.

Both e-commerce sites are based in Dublin, making Ireland the leading authority, and are therefore also monitored by Ireland’s Coimsiún na Meán, the broadcast and online regulator, and the Competition and Consumer Protection Commission for other regulatory obligations.