EC Probes Temu's Possible DSA Breaches

Chinese online marketplace Temu may be violating the EU Digital Services Act (DSA), the European Commission said in opening a formal inquiry Thursday. The company arrived in Europe in 2023, grew quickly and immediately started drawing the attention of national privacy and consumer protection authorities, EC officials said at a briefing. In May, the EC designated Temu a very large online platform as defined in the DSA after it reported having more than 45 million monthly active users in the EU. Under the act, Temu was required to assess and mitigate any systemic risks from its service, but officials said the assessment is "too general" and doesn't dive into the platform's specific risks. The EC is concerned that Temu's system for limiting "rough traders'" sale of dangerous or illegal products in the EU is ineffective and could result in a proliferation of non-compliant products in EU online markets. It's also investigating risks linked to the service's addictive design, which includes game-like reward programs and systems to mitigate those risks. Another complaint is the way the platform recommends content and products to users; a fourth is that Temu isn't offering researchers sufficient data so they can gauge its DSA compliance. In opening the probe, the EC said it relied for the first time on information from national authorities under the European Board of Digital Services Coordinators. Temu is "a real concern" for many EU DSA coordinators, officials said. It can respond as the EC continues gathering evidence. The investigation is "a promising step, but only the first," emailed the European Consumer Organisation, which submitted evidence to the EC. It urged the EC to keep pressure on Temu and force it to comply with the law as soon as possible.