EU Commission Imposes Record Fine on Temu for Violating Digital Services Act

Temu can either challenge the fine before European courts or accept it, and the company has until 28 August 2026 to submit an action plan to comply with European digital laws.

The fine is the highest penalty ever imposed on a marketplace operator under the Digital Services Act, and it is only the second time a violation of the Act has been punished with a fine.

The European Commission's Vice President, Henna Virkkunen, stated that 'Risk assessments are not box-ticking exercises – they are the backbone of the Digital Services Act.', and that Temu's risk assessment underestimates concrete risks, lacks specificity, is not based on solid evidence, and is not comprehensive.

Consequences

Temu has been criticized for its business model, which includes partially non-transparent recommendation systems and influencer advertising that could further amplify the spread of illegal products.

The company has stated that it respects the Digital Services Act but considers the Commission's decision incorrect and the penalty disproportionate.

The European Commission has also launched proceedings against Temu's competitor, Shein, also from China, under the Digital Services Act.

The proceedings against Shein primarily concern an addictive platform design that allegedly prevents EU users from making informed purchasing decisions.

Regulatory Framework

The Digital Services Act requires large online platforms to comply with stricter rules to better protect users and remove illegal content more quickly.

The Act has been in effect since February 2024, and it allows for enforcement measures to remedy acute violations.