EU investigates violations of digital services law on Chinese platform 'Teamu'

European Union, EU launch investigation into digital services law, DSA violations against Chinese online shopping platform Temu

The EU Commission said the investigation evaluates possible violations of the law regarding the sale of Temu's illegal products, its potential addictive nature, and the method of recommendation algorithms.

The Commission sent an information request to Temu on the 11th to explain what measures were taken to prevent the sale of illegal products.

However, the Commission explained that a preliminary analysis of the information request reply and the information submitted by a third party determined that an official investigation was necessary.

Temu is expected to come up with corrective measures to avoid fines during the investigation and submit them to the Commission.A violation of the

Act could result in a penalty of up to 6% of global annual sales.

Temu is targeting the global market with a variety of discount events and low-cost products, and it also made headlines when it released a television commercial during the NFL Finals Super Bowl last year that said, "Shop like a billionaire."

However, Pinduoduo, which operates Temu amid the recent intensifying competition in the low-cost online shopping market, posted 97.1 billion yuan (about 18.7 trillion won) in sales in the second quarter, below the market forecast average of 100 billion yuan (about 19.3 trillion won).

DSA is a law introduced to prevent the spread of online false information and harmful, illegal products or content.

It also prohibits using sensitive personal information data of users or so-called "targeted advertisements" aimed at minors.

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

Under the law, if it is designated as a "VLOP," it is 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 Facebook and Instagram parent Meta Platforms, Alibaba's online shopping mall AliExpress, ByteDance's social media TikTok, and X (formerly Twitter), which was acquired by Tesla CEO Elon Musk.