Chinese online retailer Temu is facing a European Union investigation into rogue traders and illegal goods

LONDON — Chinese online retailer Temu is facing a European Union investigation over suspicions that it is failing to prevent the sale of illegal products, the 27-nation bloc’s executive branch said on Thursday.

The European Commission opened its investigation five months later Add Temu to the list of “very large online platforms” that require the strictest supervision under the bloc’s Digital Services Act. It is a comprehensive legal code designed to clean up online platforms and keep internet users safe, with the threat of hefty fines.

Temu only started entering Western markets in the past two years and has grown in popularity offering cheap goods – from clothing to home products, shipped from sellers in China. The company, owned by Pinduoduo Inc., a popular e-commerce site in China, now has 92 million users in the EU.

Temu said it “takes its obligations under the DSA seriously and is continuously investing to strengthen our compliance system and protect consumer interests on our platform.”

“We will cooperate fully with regulators to support our shared goal of a safe, trusted marketplace for consumers,” the company said in a statement.

European Commission Executive Vice President Margrethe Vestager said in a press release that Brussels wants to ensure that products sold on the Temu platform “comply with EU standards and do not cause harm to consumers.”

EU enforcement will “ensure a level playing field and that every platform, including Temu, fully respects the laws that keep our European market safe and fair for all,” she said.

The commission’s investigation will examine whether Temu’s systems are doing enough to crack down on “rogue traders” selling “non-compliant goods”, amid concerns they could quickly reappear after being suspended. The committee did not single out specific illegal products sold on the platform.

Regulators are also investigating the risks of Temu’s “addictive design,” including “game-like” rewards programs, and what the company is doing to mitigate those risks.

It is also examining whether Temu meets two other DSA requirements: giving researchers access to data and transparency about recommendation systems. Companies must detail how they recommend content and products, and provide users with at least one option to see recommendations that are not based on their personal profile and preferences.

Temu now has the chance to respond to the commission, which can decide to impose a fine or drop the case if the company makes changes or can prove that the suspicions are unfounded.

Brussels has been cracking down on tech companies since the DSA came into effect last year. It has also opened an investigation into another e-commerce platform, AliExpress, as well as social media sites such as X and Tiktok, which bent to the pressure after the committee demanded answers about a new compensation feature.

Temu has also faced criticism in the United States, where a Congressional report Last year, it accused the company of failing to prevent goods made by forced labor from being sold on its platform.