Following a joint investigation at the European level, the Consumer Protection Cooperation (CPC) Network—comprising national consumer authorities across Europe—and the European Commission have issued a warning to the online marketplace, Temu, citing a range of practices that violate EU consumer laws. Temu has been instructed to rectify these practices to ensure compliance with European consumer protection standards. The platform remains under investigation, and the CPC Network has requested additional information. This enforcement action is being spearheaded by national authorities in Belgium (Directorate General for Economic Inspection), Germany (German Environment Agency), and Ireland (Competition and Consumer Protection Commission), with coordination from the European Commission.
Focus of the Investigation
The CPC Network’s inquiry covers a variety of potentially misleading or manipulative practices faced by consumers shopping on Temu. The investigation aims to determine whether Temu’s practices meet the obligations specific to online marketplaces as mandated by EU consumer laws.
Additionally, last week the European Commission initiated a separate but complementary investigation under the Digital Services Act (DSA) to assess Temu’s adherence to its guidelines. Both the DSA proceedings and the CPC Network’s efforts are designed to create a safer and more transparent online shopping environment for European consumers.
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Starting from December 13, the General Product Safety Regulation (GPSR) will impose stricter rules, requiring online marketplaces targeting EU consumers to have a designated economic operator within the EU responsible for product safety compliance. Market surveillance authorities will also gain the power to remove unsafe products from online platforms. These measures will support the goals of both the DSA and the CPC Network’s efforts.
Key Findings of the CPC Network Investigation
The CPC Network has identified several practices on Temu’s platform that they believe breach EU consumer protection laws, including:
- Fake Discounts: Misleading consumers by displaying non-existent discounts.
- Pressure Tactics: Using false claims of limited availability or time-limited offers to pressure consumers into making purchases.
- Coerced Gamification: Requiring consumers to participate in a “spin the fortune wheel” game to access the marketplace, without disclosing key terms related to the game’s rewards.
- Incomplete Information: Failing to provide accurate information about consumer rights, such as return policies and refund procedures. Temu also fails to inform customers about minimum order values required to complete purchases.
- Fake Reviews: Providing insufficient information on how the authenticity of product reviews is verified. Some reviews are suspected of being fabricated.
- Lack of Contact Information: Making it difficult for consumers to reach Temu for inquiries or complaints.
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The CPC Network has also requested additional information from Temu regarding compliance with other EU obligations, such as clearly identifying whether sellers are traders, ensuring accurate and non-misleading presentation of product rankings and reviews, and verifying the accuracy of price reductions and environmental claims.
Next Steps
Temu has one month to respond to the CPC Network’s findings and propose solutions to address the identified violations. Depending on Temu’s response, the CPC Network may engage in a dialogue with the company. Should Temu fail to adequately address these concerns, national authorities have the authority to enforce compliance measures, including imposing fines based on Temu’s revenue in affected Member States. These enforcement measures are separate from any ongoing proceedings by national authorities.
Background
The Consumer Protection Cooperation (CPC) Regulation unites consumer protection authorities from the 27 EU Member States, Norway, and Iceland to investigate and enforce consumer laws across borders. The European Commission facilitates and, when necessary, coordinates these joint efforts.
The legal basis for the CPC Network’s actions against Temu includes the Unfair Commercial Practices Directive, the Consumer Rights Directive, the Price Indication Directive, the e-Commerce Directive, and the Unfair Contract Terms Directive.
Temu was classified as a Very Large Online Platform (VLOP) under the Digital Services Act (DSA) on May 31, 2024. This designation requires Temu to comply with stringent obligations, including managing systemic risks associated with its platform. Following a preliminary review, the European Commission launched formal proceedings on October 31, 2024, to examine potential DSA violations, particularly concerning risk management, transparency of recommendation systems, and data access for researchers.
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The CPC Network’s current actions against Temu do not affect other ongoing or future investigations by national authorities or the European Commission, nor do they impact any separate enforcement actions related to product safety. National investigations have already been initiated by agencies in Hungary, Poland, and France, highlighting the broad scrutiny Temu is currently facing across Europe.
Source : European Commission
InfoCons – European Organization for Consumer Protection and Promotion of Programs and Strategies , a full member of the World Organization Consumers International , founding member of the Federation of Consumer Associations , and member of ANEC .