The low-cost Chinese e-commerce platform Temu was fined 200 million euros ($232 million) by the European Union on Thursday for failing to spot and curb the sale of illegal products.
The European Commission, the bloc’s executive arm, said that Temu had violated the European Union’s Digital Services Act, the bloc’s wide-ranging law that polices online practices. Temu is required to submit a plan to address the breaches by Aug. 28. It could also appeal.
The commission opened its investigation into Temu in 2024, one year after the company first expanded into Europe, amid what it called “a steady surge” in products sold online that it said were “unsafe, counterfeit or noncompliant.” The goods were potentially harmful to consumers, the environment and “fair competition,” officials said.
The European Union revealed on Thursday that Temu had been subject to a mystery shopping exercise as part of the investigation. In that test, “a very high percentage” of chargers failed basic safety tests and many baby toys “posed safety risks.” The toys contained chemicals that were above legal limits or posed suffocation hazards, the statement noted.
The fine was the second against a company for violating the Digital Services Act, and the largest to date. The commission previously fined X the equivalent of $139 million over transparency issues under the act. Technology firms have been hit with larger fines under other E.U. rules.
“We will continue to engage with regulators in good faith, while reviewing the decision carefully and considering all available options,” a Temu spokesperson said in a statement.
Temu is owned by the Chinese tech giant PDD Holdings and serves millions of shoppers outside of China including in the European Union’s large market of 450 million consumers. It sells clothing, beauty products, home goods and other items.
The company’s assessment of its risks “leaves regulators, users, and the public in the dark about the true scale of potential harm posed by illegal products sold on Temu,” Henna Virkkunen, the European Commission official responsible for technology, said in a statement.
“Now it is time for Temu to comply with the law,” she added.
European officials have been grappling with how to control the flow of goods from China and protect local companies struggling to compete with China’s manufacturing dominance — an issue that spans cheap everyday goods, electronics, automobiles and more. The European Commission has also opened investigations into Shein and AliExpress, two of Temu’s Chinese competitors.
On Thursday, the Commission announced an investigation into the Chinese e-commerce company JD.com’s proposed purchase of Ceconomy, a German electronics retailer. It cited “concerns that JD.com may have been granted foreign subsidies” that could distort the market.
There has also been a broader global pushback against Chinese e-commerce companies. Temu said it stopped shipping its products from China to customers in the United States last year, after the Trump administration closed a loophole for Chinese companies to avoid import fees on shipments worth $800 or less.
European officials are considering what broader measures could help to limit China’s dominance, while helping European companies to maintain market share.
All 27 European commissioners will meet on Friday for a debate about what additional trade and industrial measures might be needed as they contend with a challenging era of trade relations with China. The topic is expected to come up repeatedly in the coming weeks, including at a meeting of leaders from around the European Union in June.
