The European Commission has preliminarily found Chinese e-commerce platform Temu in breach of the Digital Services Act for failing to adequately assess risks of illegal products being sold on its marketplace.

The commission said on Monday that evidence showed "a high risk for consumers in the EU to encounter illegal products on the platform". A mystery shopping exercise conducted by the commission found consumers were very likely to find non-compliant products, including baby toys and small electronics.

According to the commission's analysis, Temu's risk assessment conducted in October 2024 was "inaccurate and relying on general industry information rather than on specific details about its own marketplace". This may have led to inadequate measures to prevent the dissemination of illegal products.

The preliminary findings could ultimately result in fines of up to 6 per cent of Temu's total worldwide annual turnover if confirmed. The commission would also have the power to order the company to take measures to address the breach.

Henna Virkkunen, executive vice-president for tech sovereignty, security and democracy, said: "We shop online because we trust that products sold in our Single Market are safe and comply with our rules. In our preliminary view, Temu is far from assessing risks for its users at the standards required by the Digital Services Act."

She added: "Consumers' safety online is not negotiable in the EU – our laws, including the Digital Services Act, are the foundation for a better protection online and a safer and fairer digital Single Market for all Europeans."

Temu, owned by PDD Holdings, now has the opportunity to respond to the commission's preliminary findings by examining the investigation file and replying in writing. The European Board for Digital Services will also be consulted as part of the process.

The findings relate to only one aspect of a broader ongoing investigation into Temu that began in October 2024. The commission is also investigating suspected breaches including the effectiveness of mitigation measures, the use of addictive design features, transparency of recommendation systems, and access to data for researchers.

The Digital Services Act requires online platforms to assess how likely consumers are to be exposed to dangerous or illegal products and implement measures to reduce such risks. It also includes specific rules for online marketplaces, such as trader traceability requirements and prohibitions on dark patterns.

The investigation is being conducted in cooperation with national Digital Services Coordinators, customs authorities and market surveillance authorities. It runs parallel to a separate investigation by the Consumer Protection Cooperation Network.

The EU is seeking to counter what it sees as a surge of potentially unsafe products from China flooding the single market. Officials previously sent a formal warning to fashion retailer Shein in May over sales tactics that allegedly violated EU consumer protection law.

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