Temu Hit With €200 Million EU Fine Over Illegal Products on Platform

European regulators have fined Chinese online retailer Temu €200 million after concluding it failed to adequately prevent the sale of illegal and unsafe products in a landmark enforcement action under the EU’s Digital Services Act.

Temu delivery packages displayed alongside a newly unpacked consumer product on a table. — A product is shown after being unpacked from Temu-branded delivery bags, illustrating the online marketplace’s retail offerings.

European regulators say Chinese online marketplace failed to adequately prevent the sale of unsafe and illegal products, marking one of the bloc’s biggest actions under landmark digital rules

BRUSSELS, Belgium — Chinese online retail giant Temu has been fined €200 million ($232 million) by the European Union after regulators concluded the company failed to do enough to prevent the sale of illegal and potentially dangerous products on its platform, in one of the most significant enforcement actions under the bloc’s Digital Services Act (DSA).

The European Commission said Temu did not adequately identify, assess and mitigate risks associated with illegal products being sold to consumers across the European Union. The decision follows an investigation that lasted nearly two years and examined whether the company complied with obligations imposed on major online platforms under the DSA.

Temu, which has rapidly expanded across Europe through heavily discounted products and aggressive online marketing, said it disagreed with the decision and considered the penalty disproportionate. The company said it was reviewing its options while continuing discussions with regulators.

Regulators Cite Safety Risks

According to the European Commission, evidence gathered during the investigation suggested consumers in the EU were highly likely to encounter illegal products on Temu’s marketplace. Officials said the company failed to conduct sufficiently rigorous risk assessments despite being classified as a Very Large Online Platform under European law.

A mystery-shopping exercise commissioned by regulators found a significant proportion of tested products failed to meet EU safety standards. Among the products examined were chargers that failed electrical safety tests and children’s toys containing excessive chemical levels or detachable parts that could pose choking hazards. The Commission also said Temu did not properly assess whether aspects of its recommendation systems and influencer-driven promotional programmes could amplify the spread of illegal products.

Strong Message to Online Platforms

Henna Virkkunen, Executive Vice-President of the European Commission responsible for technology policy, described risk assessments as a cornerstone of the Digital Services Act and said Temu’s approach fell short of legal requirements.

EU officials said the decision should serve as a warning to online marketplaces operating within the bloc that consumer protection obligations will be actively enforced. The €200 million penalty is the second major fine issued under the Digital Services Act. Last year, social media platform X was fined €120 million under the same regulatory framework.

Temu Ordered to Submit Compliance Plan

Beyond the financial penalty, Temu has been instructed to submit a detailed action plan by 28 August outlining how it intends to address the identified shortcomings. European regulators will then assess whether the measures satisfy the platform’s obligations under the Digital Services Act.

Failure to comply could expose the company to additional sanctions, including periodic penalty payments and potentially larger financial penalties in the future. Under the DSA, companies can face fines of up to 6% of their global annual turnover for serious breaches.

Temu Rejects Findings

In a statement, Temu said it respected the objectives of the Digital Services Act but disputed the Commission’s conclusions. The company argued that the decision was based largely on assessments conducted in 2024 and did not reflect improvements it has since made to platform governance, risk management and user protection measures. Temu said it would continue cooperating with regulators while evaluating possible legal responses.

Wider Implications for Global E-Commerce

The ruling is being closely watched by regulators and technology companies worldwide because it demonstrates how aggressively the European Union intends to enforce the Digital Services Act, one of the world’s most comprehensive digital regulation frameworks.

The legislation places extensive obligations on major online platforms to identify risks, remove illegal content and products, improve transparency and protect consumers. For fast-growing international marketplaces such as Temu, Shein and other cross-border e-commerce platforms, the decision underscores increasing regulatory scrutiny over product safety, marketplace accountability and consumer protection.

As governments around the world seek greater oversight of digital marketplaces, the EU’s action against Temu could become a benchmark case for future regulation of global e-commerce platforms.

Reporting by Edem Hodasi
Additional sourcing and verification: European Commission, Reuters and BBC News.