EU watchdog bites at Chinese ecommerce giant over alleged consumer violations

The Chinese fast-fashion e-commerce retailer Temu, owned by PDD Group, found itself in the crosshairs of European Union regulators on Thursday.

A complaint was lodged against the company with the European Commission, alleging a potential breach of the Digital Services Act's rules for online platforms. This complaint was filed by BEUC, a pan-European consumer organisation, while 17 of its national members from countries like France, Italy, and the Netherlands also lodged grievances with their respective authorities.

The EU’s landmark Digital Services Act requires online marketplaces and intermediaries to combat illegal and harmful content, as well as counterfeit products on their platforms.

At the heart of the issue lies Temu's alleged failure to provide consumers with crucial information about the sellers on its platform and whether their products meet EU safety standards. With 75 million monthly users in the EU as of March, this oversight could have far-reaching consequences, the complainant alleges.

Furthermore, the complaint accuses Temu of employing manipulative tactics, such as "dark patterns," to persuade consumers to spend more than intended. It also cites a lack of transparency in how the platform recommends products to users.

BEUC's Director General, Monique Goyens, did not mince her words, stating, "Temu is being complacent here because it is breaching the EU's Digital Services Act. Products sold on marketplaces, whether online or offline, whether they are European, American or Chinese, must be safe and comply with European law if they sell to European consumers."

While Temu, which entered the EU market just over a year ago, claims to be committed to complying with local laws and regulations, the company acknowledged the seriousness of the complaint. In a statement, Temu expressed its intention to "study it thoroughly" and continue dialogues with stakeholders to improve its service for consumers.

As the EU tightens its grip on digital platforms, this case underscores the importance of transparency and consumer protection in the booming e-commerce sector.

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