Dive Brief:
- The European Commission has opened a formal investigation into Temu to determine whether the fast fashion giant violated the Digital Services Act, according to a statement Thursday.
- The probe is focused on the sale of illegal products, the potentially addictive design of the service, the systems used to recommend products to users and data access for researchers, per the release.
- In June, the Commission requested information from Temu and its rival fast fashion platform Shein on their compliance with the law. Last month, it broadened the scope of its request from Temu, asking the company to detail its steps to prevent illegal products from appearing on its platform. The Commission hasn’t released any updates on its Shein request.
Dive Insight:
Temu intends to fully cooperate with the regulators, a spokesperson said in an email to Fashion Dive.
“Temu takes its obligations under the DSA seriously, continuously investing to strengthen our compliance system and safeguard consumer interests on our platform,” the spokesperson said.
The Commission launched the investigation based on information it gathered from its initial requests, as well as from third party sources, per the release.
If the Commission finds that Temu violated the DSA, the fast fashion company would face liability and the Commission would carry out another in-depth investigation.
“We want to ensure that Temu is complying with the Digital Services Act,” Margrethe Vestager, executive vice president for a Europe Fit for the Digital Age, said in the release. “Particularly in ensuring that products sold on their platform meet EU standards and do not harm consumers. Our enforcement will guarantee a level playing field and that every platform, including Temu, fully respects the laws that keep our European market safe and fair for all.”
Around the same time as the announcement of the investigation, the Temu spokesperson said the company was in discussions with the European Commission to join the “Memorandum of Understanding on the sale of counterfeit goods on the Internet,” a voluntary agreement facilitated by the Commission to prevent counterfeit goods on online marketplaces. Signees include Amazon, Alibaba Group and Vestiaire Collective, among others.
“Counterfeiting is an industry wide challenge, and we believe that collaborative efforts are essential to advancing our shared goals of protecting consumers and rights holders,” Temu’s spokesperson said.
