temuthe super low cost ecommerce marketplace owned by Chinese online retailer Pinduoduois to face the strictest rules of the European Union after the designated authorities The company is a “very large online platform” (VLOP) under the Digital Services Act (DSA).
News arrives about two weeks later European consumer protection groups filed coordinated complaints against Temu over a series of alleged DSA-related violations, and a year after Temu opened its first office in the region. Later, Temu became pass 75 million users in the EU, according to some reports, a figure that is well above the 45 million EU threshold to be classified as VLOP.
Additional scrutiny
The standards established in the DSA have applied since February with 19 separate platforms Initially subject to additional scrutiny, either as a VLOP or as a large online search engine (VLOSE), covering products belonging to Alibaba, Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft and Snap, among others. In December, a three additional porn sites received VLOP status before the official application date, while Temu’s Chinese retail rival Shein was the first to be designated VLOP after the rules came into practice.
Temu is now the 24th company to face additional obligations under the DSA, meaning the company will face additional scrutiny over its use of algorithms, artificial intelligence, content ratings, recommendation tools and the like, while also having to evaluate and mitigate any “systemic risks” that come from Temu’s services, including dealing with counterfeit, illegal or unsafe products listed on its platform.
In mid-May, BEUC (the European consumer organization representing 45 consumer protection groups across the bloc) filed a formal complaint against Temu and requested that lawmakers designate the platform as a VLOP. At the same time, more than a dozen BEUC member organizations filed complaints with their national consumer protection authorities, accusing Temu of violating the DSA.
And it seems that the European Commission has listened.
While the additional rules applying to VLOPs are officially binding from August for companies that have already been designated as such, Temu will have until the end of September because there is a four-month grace period to comply from the time of the notification, starting today. .
Thereafter, Temu will need to work with the Commission and the Irish Digital Services Coordinator (Temu’s European headquarters is in Dublin) to provide regular risk assessment reports, once initially and then annually in the future.
TechCrunch has reached out to Temu for comment and will update here when we hear back.