Report from the New York Times
In Brief – The European Union has fined the Chinese e-commerce platform Temu €200 million ($232 million) for violating the Digital Services Act (DSA) by failing to adequately identify and prevent the sale of illegal products on its marketplace. The penalty follows an investigation launched in 2024. The European Commission announced that it concluded that Temu’s risk-assessment and mitigation measures were insufficient, leaving regulators and the public unable to fully understand the scale of harm posed by illegal products sold through the platform. The company has been ordered to submit a compliance plan by August 28 outlining how it will address the identified violations. Temu said it would continue cooperating with regulators while reviewing the decision and considering its legal options, including a potential appeal.
Context – Although the DSA was often described as a response to online hate speech, disinformation, and threats to children, the European Commission always argued that the law was very clear in covering all platforms that expose their users to content which can be illegal, including online marketplaces for physical or digital goods, which they argued could be dangerous, fraudulent, or illegal. Marketplaces AliExpress, Shein and Temu have each faced DSA investigations by the Commission, and regulatory scrutiny of the Chinese platforms, especially rapidly growing newcomers Shein and Temu, is quickly expanding. France is a hotspot. It’s Minister of Small and Medium Businesses said that the Chinese online retail platforms will face a “year of resistance” from traditional storefront retailers and their backers in the French government, and the CEO of a French grocery store chain recently called for Shein and Temu to be entirely banned in Europe for two years while new EU rules to regulate them are crafted. With TikTok and the three Chinese marketplace platforms facing DSA enforcement, and Temu now receiving a fine in excess of the one issued to X, EU officials also have an additional talking point against charges that their tech regulations discriminate against US companies.