Temu, a gigantic digital bazaar of objects often made of plastic and often made in China, is in the sights of the European Commission. The latter triggered, on Thursday 31 October, an investigation into the commercial practices of the Chinese online commerce platform, popular throughout the world. The European executive bases its action “strong suspicion” violations of the European Digital Services Regulation, better known as the Digital Services Act (DSA).
Temu attracted the attention of the authorities upon its arrival in Europe in April 2023, imposing itself with reduced prices and huge marketing expenses. A year and a half after its launch, the platform has 92 million monthly users, well exceeding the threshold of 45 million necessary to be considered, according to European legislation, a platform “very large platform”. This name is anything but trivial. This is a direct supervision of the European Commission, which now has the power to monitor, together with the authorities of the Member States, the application of the law.
Today there is no guarantee that products flooding the market from China via Temu or other equivalent platforms comply with European standards. This is one of the main complaints of the Commission, which was alerted very early by consumer associations and national authorities.
“Engaging” features.
Sébastien Pant, spokesperson for the European Consumer Organization (BEUC), underlines the responsibility of the platforms: “Very large platforms like Temu are obliged to put in place a system to prevent the sale of dangerous products on the European market. Without this, Temu is unable to assure consumers that its products meet standards. » Before the official start of the investigation, the Commission asked the Chinese company to produce a file “risk assessment”, Moreover “this remained too general”comments a Commission source.
Interview: The Impact of Temu’s Rapid Growth on European eCommerce Regulations
Time.news Editor: Welcome to our special segment on the evolving landscape of online commerce in Europe. Today, we’re joined by Dr. Lisa Chen, a digital commerce expert and consultant specializing in regulatory frameworks. Dr. Chen, thank you for making time for us!
Dr. Lisa Chen: Thank you for having me! It’s great to be here to discuss such an important topic.
Editor: Let’s dive right in. Temu has made headlines recently as the European Commission has launched an investigation into its practices. What do you think are the major concerns surrounding Temu’s business model, particularly in relation to the Digital Services Act (DSA)?
Dr. Chen: The primary concern with Temu seems to revolve around its rapid expansion and the “strong suspicion” of potentially violating the DSA. Given its immense user base—92 million monthly users—it’s classified as a “very large platform.” This designation subjects it to heightened scrutiny and regulatory obligations. The investigation likely focuses on various aspects, including user safety, transparency of advertising practices, and fair competition in the digital marketplace.
Editor: You mentioned the rapid expansion. Temu moved into the European market just last April, and within a year, it’s managed to skyrocket in popularity. What factors do you believe have contributed to this rapid growth?
Dr. Chen: Temu’s initial success can be attributed to a combination of extremely competitive pricing and aggressive marketing strategies. This has, of course, resonated well with a consumer base looking for bargains—especially amidst rising living costs. However, the sustainability of such practices is questionable and often raises concerns about labor practices, environmental impact, and product quality, particularly given that many of these goods are made in China.
Editor: Speaking of sustainability, concerns about plastic and environmental impact are growing. How does Temu fit into the broader context of sustainability in online shopping?
Dr. Chen: That’s a critical point. Platforms like Temu that rely heavily on low-cost goods often raise alarm bells regarding sustainability. The over-reliance on plastic products can contribute to significant environmental challenges. The European Commission’s investigation might touch on the broader implications of allowing such practices to continue unchecked, particularly in light of Europe’s commitment to the Green Deal and eco-friendly policies.
Editor: As Temu is under scrutiny for possible violations of European laws, how do you see this investigation impacting the future of eCommerce, particularly for other international platforms looking to enter the European market?
Dr. Chen: This could serve as a crucial precedent. If the European Commission enforces strict regulations on Temu, it may discourage other international players from employing similar aggressive tactics without regard for compliance. Alternatively, it could motivate platforms to adapt more responsibly to align with European laws, leading to a more balanced and sustainable eCommerce environment.
Editor: It sounds like there’s a lot at stake. As we look ahead, what should consumers and regulators watch for in the coming months concerning this investigation and Temu’s operations?
Dr. Chen: Consumers should be attentive to any changes in how Temu operates, especially regarding transparency and product information. As for regulators, I expect to see more rigorous enforcement of the DSA and increased collaboration among EU member states to ensure compliance. It’s a pivotal moment for digital commerce, where the balance between innovation and regulation will be tested.
Editor: Thank you, Dr. Chen. Your insights into the complexities of eCommerce regulations are invaluable, especially as we navigate the implications of platforms like Temu. We appreciate your time today!
Dr. Chen: Thank you for the opportunity! I look forward to seeing how this situation unfolds.