The EU Commission fines Temu €200 million: “Digital Services Act breached”

Brussels – It may not carry the same weight as the “assassin’s mace” represented by the disruption of Chinese raw material supplies to the European Union, but Brussels is attempting to use its sanctioning powers to make it clear to Beijing that there are rules in trade and they must be respected. The European Commission has announced today (28 May) that it has imposed a fine of €200 billion on Temu, for breaching certain articles of the Digital Services Act (DSA).

Founded in 2022 and run by the Chinese company PDD Holdings, Temu is a popular e-commerce site where you can buy a vast range of products at extremely low prices. There is just one small catch: according to the EU executive, it often does so illegally.

More specifically, the investigation conducted by Brussels found that “the company had failed to adequately identify, analyse, and assess the systemic risks associated with the sale of illegal products on its platform and the resulting harm to EU consumers.”

Welcoming the fine imposed today, the Commissioner for Digital Technologies, Henna Virkunnen, emphasised that “risk assessment is not merely a bureaucratic exercise, but the heart of the DSA” and that carried out by Temu “underestimates concrete risks, lacks specificity, is not based on solid evidence, and is not sufficiently comprehensive.” For this reason—the Finnish politician concluded—“now is the time for Temu to comply with the law.”

Infringements identified by Brussels: from illegal chargers to toys posing a choking hazard

Formal proceedings have been opened by Brussels against the Chinese e-commerce site on 31 October 2024, with the investigation focusing on possible breaches of two articles of the Digital Services Act, the European regulation that, from 2024, governs the activities of large online platforms and digital services operating in the EU.

The first article to come under scrutiny was Article 34, which states that so-called platforms with more than 45 million European users (Temu is among them) must conduct an adequate risk assessment of their operations and the products they sell. The second article in question was Article 35, under which—once the risks have been identified—companies must take concrete measures to mitigate them.

Confirming the preliminary conclusions already published on 28 July, the Commission has today officially found that the Chinese giant has breached both provisions. In particular, having analysed the content of the risk assessment report submitted by Temu in 2024 and the interim report issued at Brussels’ request in 2025, three specific infringements were identified.

First of all, according to the official statement released by the Berlaymont Building, the Chinese giant “has significantly underestimated the frequency with which European consumers may come into contact with illegal products” on its platform. This is the crux of the Brussels j’accuse: for example, an independent organisation’s
mystery shopping, conducted at the Commission’s request, found that a high percentage of chargers, toys, and jewellery did not comply with EU safety standards. A senior European official close to the dossier specified that “many chargers could catch fire and many children’s toys contained chemicals exceeding the established limits and detachable parts that posed a choking hazard.”

Secondly, the EU Commission’s investigation concluded that the reports submitted by TEMU were based on “general information regarding the risks of the entire e-commerce sector, rather than specific data and evidence concerning the operation of the TEMU platform.” For example, important factors such as user reports were reportedly not taken into account. Finally, “the way in which the very design of the service—including recommendation systems and promotional programmes entrusted to affiliated influencers—could amplify the spread of illegal products was not adequately assessed”.

“These are things Temu should have been aware of,” the senior official pointed out, “because a series of external studies carried out by consumer associations and other bodies had already concluded that the company’s website features a high proportion of products that do not comply with EU regulations.”

The Commission on the controversy surrounding the fine: “Further investigations may lead to further sanctions”

In officially announcing the amount that Temu will have to pay to Brussels, the Commission noted with satisfaction that “this is the highest fine imposed to date under the DSA, exceeding the one imposed on the social network X on 4 December

(€120 million, ed.).”

While the figure may seem significant in absolute terms, the picture changes radically when expressed as a percentage of Temu’s total turnover in 2025, which is €79.5 billion. From this perspective, the fine imposed today will cost the Chinese giant around 0.25 per cent of its revenue: an objectively laughable percentage, especially given that the DSA sets a much higher maximum limit of 6 per cent.

“The 6 per cent figure is a ceiling, not a target we must necessarily aim for. And in any case, this figure may well be peanuts, but paying it remains more expensive than complying with the DSA’s requirements,” the EU official said in response to the accusations.

Furthermore, Brussels is calling for a forward-looking approach because, as the insider pointed out, “we must not forget that this is just one of the proceedings currently underway against Temu.” In fact, when it launched its investigation in October 2024, the Commission began looking into numerous other issues in addition to the risk assessment: from the distribution of illegal products to restrictions on access to the platform’s data for qualified researchers, including the so-called
addictive design, namely those strategies designed to keep people in front of the screen for longer and make them more prone to compulsive buying.

“We hope that these investigations too can be concluded soon,” said the senior official, before noting that “they too could lead to the imposition of another fine.”

For Temu, therefore, there is the risk that this may not be the end of the matter. In the meantime, however, the Asian e-commerce platform will have to deal with this initial fine. Under Article 75 of the DSA, it will have until 28 August to submit an action plan to the Commission outlining the measures necessary to remedy the identified infringements. At that point, Brussels will assess the plan and set a reasonable deadline for Temu to implement the required measures, failing which it will face further periodic penalties.

In any case, today’s fine will stand: “It must be paid within three months and, although there is the possibility of appealing, I see no reason why the penalty could be suspended,” the senior official clarified.