Dive Brief:
- Temu is facing another European Commission probe after the Consumer Protection Cooperation Network found that a number of the fast fashion giant’s practices infringe on EU consumer laws, according to a press release Thursday.
- The investigation covers a broad range of Temu’s services, including some that may mislead customers and “unduly influence their purchasing decisions,” the CPC Network said in the release. The probe also investigates whether Temu complies with obligations for online marketplaces under EU law.
- The investigation is in addition to an earlier probe announced on Oct. 30 over concerns that Temu violated the Digital Services Act through the potential sale of illegal products, the addictive design of its service and the systems it uses to recommend products to users. Though the investigations are separate, the Commission said they are complementary to each other.
Dive Insight:
The probe is led by national authorities of Belgium, Germany and Ireland, under coordination of the EU Commission, the release stated.
The CPC Network notified Temu of the violating practices and has directed Temu to bring its business operations in line with consumer laws in the EU.
Specifically, the probe takes issue with Temu offering fake discounts, pressure selling, forced gamification — including a “spin the fortune wheel” feature that customers must play to enter the website — missing and misleading information, and fake reviews. It also says customers can’t easily contact Temu for questions or complaints.
Temu has one month to reply to the CPC Network’s findings and state how it will address the issues. If Temu fails to take action, EU authorities can take enforcement action to ensure compliance, which could include fines based on Temu’s annual turnover in impacted EU Member States, per the release.
In an email to Fashion Dive, a Temu spokesperson said the company acknowledged the Commission’s concerns and was committed to working with regulators to address the issues and comply with the law.
“Although we have gained popularity with many consumers in a relatively short time, we are still a very young platform — less than two years in the EU — and are actively learning and adapting to local requirements,” the spokesperson said. “We will fully cooperate with this investigation, as we believe that such scrutiny benefits consumers, merchants, and the platform in the long term.”
The Commission previously asked Temu and its fast fashion rival Shein to detail their compliance with the DSA in June. It hasn’t provided an update on its Shein request.
Temu has faced scrutiny from entities in the U.S. as well. Last year, a group of U.S. lawmakers asked the company to confirm it didn’t use forced labor in its supply chain and opened an investigation into Temu regarding import tariffs.
