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The European Union has expanded its examination of online marketplaces by open a formal proceedings on Chinese low - cost vitamin E - commerce program , Temu , under the Digital Services Act ( DSA ) , theCommission announcedThursday .
enforcer of the online government activity framework will now dial up their oversight of Temu . The axis ’s suspicions are concentrate on concerns about the sale of illegal products , which may include thing like toy and cosmetic that could harm consumers by not complying with EU standards ; habit-forming pattern related to how the marketplace seek to gamify shopper ’ fight ; the transparency of Temu ’s recommender systems , including the lack of a non - profiling - based alternative for user ; and issues with debt instrument associate to researcher access to public data .
If the Commission sustain any breaches of the DSA , Temu ’s parent , Pinduoduo , could face amercement of up to 6 % of its annual orbicular dollar volume .
The EU only designated Temu as subject to the DSA ’s strictest set of rules — which apply transparency requirements on larger platform as well as requiring they measure and mitigate systemic risks — back in May , with conformation for those rules ask from this calendar month , so the bloc ’s enforcers are moving quickly .
They ’ve antecedently said on-line marketplace safety is one of their core priorities for DSA enforcement , opening anearlier investigating of the tocopherol - Department of Commerce heavyweight AliXpressthis spring ( which rest ongoing ) .
Widespread concerns
In a briefing with journalist forwards of the courtly proceeding being made public , Commission officials said the swiftly unfold investigation on Temu reflects both how chop-chop the market has grown in the part ( it set up only last class ) , and how many concerns have been shared by others , include consumer protection agencies and Member State - stratum Digital Services Coordinators ( DSCs ) , which implement the DSA ’s general rules .
The Commission noted this is the first time it ’s building an fact-finding compositor’s case on the basis of datum provide by DSCs , who have had an supervising use on Temu since mid - February . DSCs in Ireland and Germany are among those that have render to the EU data on Temu .
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Customs sureness and market surveillance physical structure have also raised concerns , the Commission tell .
Back in May , consumer protections from around the EU snaffle headlines after wedge a series of coordinated complaints against Temu , accusing the company of breaching the DSA ’s general rule . Since then the EU has charter over superintendence of Temu after it was confirmed as a so - called very large online platform .
Temu ’s assessment and extenuation of systemic peril is one of the areas the Commission will now investigate .
Deeper look
functionary tell journalists they are concern Temu ’s risk assessment document — which the companionship shared with the EU at the end of September — was “ far too generic . ”
The axis said it ’s disquieted about illegal products quickly reappearing on the platform after being taken down and “ rogue traders ” also respawning . But it wants to do more systemic checks to find out how extensive a problem this might be .
The Commission ’s business organisation on addictive design relate to DSA obligations on platforms to prevent negative impacts on exploiter ’ mental well - being . Temu ’s system of gamified payoff course of study and feature article like indefinite scrolling merit close judgement , official said .
The investigator accession take relates to public data that Temu should be making uncommitted ( such as through genus Apis ) so that independent researchers can study things like its rates of take downs of non - compliant products .
While the axis had already get off Temu a couple ofrequests for informationregarding its DSA submission — including in relation to illegal product — the Commission ’s conventional proceeding unlocks more enforcement powers , meaning the EU will be able to deepen its investigation .
official stressed that while they have reason to distrust Temu could be non - compliant they need to gather more data to confirm whether or not there has been a breach .
The EU also taper out that DSA investigations may be closed if a program volunteer commitment that alleviate concerns . And the bloc remains keen for the regulation to be seen moving the needle on precedence safety issues — hence the Commission accepting binding commitment from TikTok to dissolve concerns around addictive innovation of the TikTok Lite appearlier this year .
In a statement responding to the DSA probe , Temu wrote : “ Temu takes its obligations under the DSA seriously , continuously investing to strengthen our compliance organization and safeguard consumer interest on our political platform . We will cooperate fully with regulators to endure our shared goal of a safe , trusted marketplace for consumer . ”
The companionship also noted that it is in discussions to link up the Commission ’s Memorandum of Understanding on the sale of counterfeit goods on the internet — a voluntary effort to boost effort to combat the sale of counterfeit goods online .
“ Counterfeiting is an industrywide challenge , and we believe that collaborative efforts are essential to advancing our shared destination of protecting consumers and rights holder , ” Temu added .
react to the Commission ’s DSA proceeding announcement in a assertion , Fernando Hortal Foronda , digital insurance policy officer at the European Consumer Organisation , welcomed the development : “ There are many problem consumer groups have identified with Temu , which let in many unsafe or illegal products on sale or the frequent use of design techniques to trick consumers .
“ This decision by the Commission is a promising footstep , but only the first . Now , it ’s important the Commission maintain up the pressure sensation on Temu and pushes the company to comply with the law as soon as possible . It is neither fair to consumers , nor to the many businesses that do comply , that certain companies such as Temu get away with barrack the practice of law . ”
