(International)EU investigates digital services law violations on Chinese platform ‘Teamu’

The EU Commission said the investigation assessed possible violations of law regarding the sale of Temu’s illegal products, their potentially addictive nature and the method of recommendation algorithms.

The Commission sent a request for information to Temu on the 11th to explain what measures are being taken to prevent the sale of illegal products.

However, the Commission stated that a preliminary analysis of the response to the request for information and the information provided by a third party determined that a formal investigation was necessary.

Temu is expected to take corrective measures to avoid fines during the investigation and present them to the Commission.

The law could result in penalties of up to 6% of global annual sales.

Temu targets the global market with a variety of sale events and low-cost products, and also made headlines last year when it released a television commercial during the NFL Finals Super Bowl that read “Shop like a billionaire.”

However, amid the recently intensified competition in the low-cost online shopping market, Pinduoduo, which operates Temu, reported sales of 97.1 billion yuan (about 18.7 trillion won) in the second quarter; this was below the average market estimate of 100 billion yuan (about 19.3 trillion won). trillion won).

DSA is a law passed to prevent the spread of misinformation and harmful, illegal products or content online.

It also prohibits the use of users’ sensitive personal information or “targeted advertising” targeting minors.

Since February, it has been implemented on all online platforms except those with fewer than 50 employees and annual sales of less than 10 million euros (about 14.3 billion won).

If designated as a “VLOP” under the law, it would be subject to stronger regulations such as a separate obligation, and Temu was also designated as a VLOP in May.

The EU is also investigating DSA violations against Meta Platforms, the parent company of Facebook and Instagram, Alibaba’s online shopping mall AliExpress, ByteDance’s social media TikTok and X (formerly Twitter), which was acquired by Tesla CEO Elon Musk .

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