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Consumer protection groups around the European Union have filed coordinated complaints against Temu, accusing the Chinese-owned ultra low-cost e-commerce platform of a raft of breaches related to the bloc\u2019s Digital Services Act (DSA). Temu only launched in the region about a year ago but recently reported <\/a>blasting past 75 million monthly users.<\/p>\n Penalties for confirmed breaches of the EU\u2019s online governance and marketplace safety regime can reach up to 6% of the global annual turnover of the platform\u2019s parent. For some reference, Temu\u2019s parent Pinduoduo reported<\/a> revenues of nearly $35 billion for 2023, nearly double on the year prior; Temu was estimated<\/a> to account for about 23% of that amount last year.<\/p>\n BEUC, the European consumer organization that represents 45 regional consumer protection groups across 31 EU countries, said Thursday it\u2019s filed a complaint against Temu with the European Commission \u2014 calling for the EU to urgently designate it as a \u201cvery large online platform\u201d (VLOP) under the DSA. (VLOP-status would mean Temu has to comply with additional algorithmic transparency and accountability rules, including mitigating systemic risk. Other e-commerce VLOPs include<\/a> Alibaba, Amazon, Booking.com, Google Shopping and Zalando.)<\/p>\n At the same time, 17 of BEUC\u2019s member organizations around the bloc have filed DSA complaints with their national consumer protection authorities \u2014 accusing Temu of breaching the regulation\u2019s general rules which have applied to Temu since mid-February<\/a>.<\/p>\n The coordinated complaints allege the e-commerce giant is failing to meet a raft of DSA requirements, including trader traceability requirements; rules against manipulative design; and transparency around product recommender algorithms.<\/p>\n Commenting in a statement, Monique Goyens, director general at BEUC, accused the marketplace of being \u201crife with manipulative techniques\u201d designed to push consumers to spend more, and claimed insufficient information about traders \u201cfrequently leav[es] consumers in the dark about who they are purchasing products from.\u201d<\/p>\n \u201cThis lack of traceability prevents consumers from taking an informed decision or to know if a product complies with EU safety rules,\u201d she added. <\/p>\n The consumer protection groups are also raising concerns about minor safety, pointing out the extreme price discounting and gamification features baked into Temu\u2019s platform are likely to be attractive to children. <\/p>\n \u201cTemu does not guarantee its users a safe, predictable, and trustworthy online environment as the law requires,\u201d they argue in the complaint. \u201cAmong other things, we have strong concerns that consumers are falling prey to manipulative techniques, that Temu fails to ensure the traceability of the traders operating on its platform, or that its overall functioning remains opaque, all of which breach the Digital Services Act.\u201d<\/p>\n \u201cUltimately, the high number of dangerous products sold on Temu by untraceable traders, through manipulative practices and opaque recommender systems, are ingredients of a toxic cocktail likely to impair minors\u2019 privacy, safety, and security,\u201d the groups also warn.<\/p>\n The coordinated complaints follow some individual actions by consumer groups concerned about the safety and legality of products for sale on Temu\u2019s marketplace. <\/p>\n For example, last fall, Italian consumer group Altroconsumo ran a test of cosmetics purchased on the platform and found the vast majority failed to list (or fully list) ingredients. Earlier this year, the German consumer organisation vzbv raised concerns about misleading product reviews and price discounts displayed on the platform.<\/p>\n As Temu isn\u2019t currently a designated VLOP, its oversight with the DSA\u2019s general rules falls to competent Digital Services Coordinators in EU Member States where its service operates. Ireland\u2019s media watchdog, the Coimisi\u00fan\u00a0na\u00a0Me\u00e1n, is in the frame as Temu opened an office in Dublin a year ago<\/a>.<\/p>\n However the complaint is likely to amp up pressure on the EU to designate Temu as a VLOP. A Commission spokesperson told us it\u2019s aware of Temu recently reporting<\/a> more than 45 million monthly active users in the EU \u2014 which is the threshold for triggering VLOP status \u2014 adding: \u201cWe are in contact with the platform in view of a possible designation in the future.\u201d<\/p>\n Temu has been contacted for comment. <\/p>\n Last month<\/a> Shein, another Chinese e-commerce giant that\u2019s been locked in a fierce rivalry with Temu<\/a> \u2014 including in relation to international market expansion \u2014 was designated by the EU as a DSA VLOP after reporting passing the 45M MAUs threshold.<\/p>\n While, back in March<\/a>, the EU opened its first DSA investigation on a marketplace, targeting another China-owned ecommerce platform \u2014 Alibaba\u2019s AliExpress \u2014 which had been named a VLOP in the first wave of designations in April last year<\/a>.<\/p>\n The Commission said then that it suspects AliExpress of breaching DSA rules in areas linked to the management and mitigation of risks; content moderation and its internal complaint handling mechanism; transparency of advertising and recommender systems; traceability of traders; and data access for researchers. The investigation \u2014 one of several the EU has opened into VLOPs since last year\u2019s compliance deadline<\/a> for these larger platforms kicked in \u2014 remains ongoing. <\/p>\n