Chinese online retailer Temu has been fined €200 million ($232 million) by European Union regulators for failing to adequately prevent the sale of illegal products on its platform, marking one of the largest penalties issued so far under the bloc’s sweeping Digital Services Act (DSA). The decision, announced Thursday by the European Commission, comes after a broad investigation into the company’s practices and could lead to additional sanctions in the coming months.
The investigation was launched following complaints filed by the pan-European consumer organization BEUC along with 17 national consumer groups. EU authorities concluded that Temu failed to properly identify, assess, and mitigate the systemic risks linked to illegal goods sold through its marketplace, exposing European consumers to potential harm. Regulators also criticized the platform for shortcomings in the operation of its recommendation systems and promotional campaigns involving affiliated influencers, arguing that these mechanisms may have amplified the visibility and spread of illegal products.
The European Commission stated that Temu did not demonstrate sufficient diligence in evaluating the risks posed by its rapidly expanding marketplace. Officials said the platform’s governance systems failed to meet the standards required under the DSA, legislation designed to force large digital companies to take stronger action against illegal and harmful content online.
Temu rejected the ruling and described the fine as excessive. In a statement, the company said it respected the objectives of the Digital Services Act and supported the need for clear and consistent rules across the digital economy. However, it argued that the Commission’s decision was disproportionate and based on an earlier assessment conducted in 2024 that no longer reflects the current state of its systems.
The company said it had cooperated with regulators throughout the investigation and had since introduced additional measures aimed at strengthening risk assessment, platform oversight, and consumer protection. Temu also stated that it would continue engaging with EU authorities while considering all available legal and regulatory options in response to the ruling.
EU tech chief Henna Virkkunen described the case as a defining moment for enforcement of the Digital Services Act, emphasizing that risk management is a cornerstone of the legislation. She said the penalty sends a strong signal to digital platforms operating in Europe that regulators are prepared to impose severe consequences for failing to protect consumers.
The Commission has ordered Temu to submit a detailed action plan by August 28 outlining how it intends to comply with EU requirements. Regulators will then evaluate the measures before deciding within two months whether the company has sufficiently addressed the concerns.
Authorities also confirmed that broader investigations into Temu remain ongoing. Regulators are still examining whether aspects of the platform’s design may be addictive, whether illegal products continue to circulate widely on the service, and whether researchers and authorities are receiving adequate access to platform data.
Under the Digital Services Act, companies can face penalties of up to 6% of their global annual turnover for serious violations. Temu’s punishment is now the second major fine imposed under the law, following a €120 million penalty issued last December against Elon Musk’s social media platform X.
