Temu Receives Record Fine: 200 Million Euros for Selling Illegal Products in the EU
The European Commission has enforced the rules of the Digital Services Act (DSA) with a fine of €200 million imposed on Temu, the Chinese e-commerce platform owned by PDD Holdings. This is the second highest fine ever applied under the DSA, surpassed only by the €120 million fines to X last December.
The harsh blow comes after nearly two years of investigation initiated by a complaint from the BEUC and 17 other consumer organizations. The EU antitrust office found that Temu did not properly identify the systemic risks associated with illegal products available on its platform, as stated in the official communication from the European Commission.
Problems Arising for Temu: Security Flaws and Risks Found
The risk assessment presented by Temu for 2024 was based on generic information related to the e-commerce sector rather than on specific metrics from its own platform. As a result, the company significantly underestimated the exposure rate, which refers to how often its 92 million active users in the European Union encounter illegal or non-compliant products while browsing.
Inspections based on mystery shopping (anonymous control purchases) revealed systemic critical issues: a concerning share of items failed to meet the safety tests mandated by community standards. Among the more severe cases, several baby toys posed high chemical risks and could lead to choking, while numerous small appliances blatantly violated European safety standards.
A separate issue concerns the recommendation system of the algorithm. Temu did not conduct an adequate impact assessment on how its artificial intelligence systems and partner influencer networks could amplify the visibility and dissemination of illegal products on a large scale, directing them directly to consumers.
The European Union's Roadmap and the Specter of Multibillion-Euro Sanctions
The European Commission has given Temu an ultimatum until August 28, 2026 to submit a detailed and corrective action plan. Once the document is received, Brussels will have two months to assess its suitability and determine the compliance of the proposed remedies.
However, compliance on products is just one piece of the puzzle. The EU executive is continuing to investigate other regulatory pillars provided by the DSA: persuasive design mechanisms (the so-called dark patterns aiming to manipulate user behavior), algorithmic transparency, and actual access to platform data by independent researchers. Therefore, the remaining strands of the broad investigation remain open.
Should further systemic violations be identified, Temu risks a financial penalty of up to 6% of its annual global turnover. Considering the revenues of the parent holding company, PDD Holdings, such a fine could amount to several billion euros.
A Crackdown That Sets a Precedent for Global E-commerce
The DSA imposes a strict obligation on large online platforms to protect users from counterfeit and dangerous content or goods. With an audience of 92 million European consumers, exposure to high-risk items (such as electronic devices lacking CE certification or toxic toys) has prompted authorities to take immediate action.
By censuring the insufficient risk assessments previously performed by the Chinese giant, the European Commission has sent a stern warning to the entire e-commerce sector: the EU is no longer willing to tolerate the penetration of illegal and untraceable goods into the single market. This measure marks a point of no return in the regulation of cross-border marketplaces. In the coming months, Temu will need to demonstrate a radical and structural change of course, or risk facing even more severe penalties that could jeopardize its operations on the continent.