The European Consumer Organization ("BEUC") called to action against Temu on 14 May 2024, claiming the online marketplace was in breach of EU Regulation 2022/2065 (the Digital Services Act – "DSA"). Consumer organizations in several Member States have filed complaints with their competent Digital Services Coordinators and alerted the European Commission. The organizations claim Temu to be a Very Large Online Platform ("VLOP"), which means that Temu must comply with the most stringent rules of the DSA.
The BEUC states in its report that:
“Temu does not guarantee its users a safe, predictable, and trustworthy online environment, as the law requires. Among other things, we have strong concerns that consumers are falling prey to manipulative techniques, that Temu fails to ensure the traceability of the traders operating on its platform, or that its overall functioning remains opaque, all of which breach the Digital Services Act.”
Temu is an online marketplace that intensively markets itself on the European market through gamification, influencer marketing, and discounts. It is amongst the most downloaded apps in many European countries. Temu's business model involves products being shipped directly to consumers from factories or warehouses.
In summary, the BEUC has stated that they believe that Temu fails to comply with its obligations as an online platform under the DSA relating to:
- Traceability of traders (Art. 30), where it's claimed that the information about traders' traceability and identification is often incomplete or not disclosed in an easily accessible and intelligible way;
- Compliance by design (Art. 31), including concerns such as products being made available without the legally required information;
- Transparency of recommender systems (Art. 27), where the BEUC states that it is not clear and transparent which information Temu uses and the way recommender systems are designed;
- Manipulative practices (Art. 25), where the BEUC highlights several examples of alleged manipulative practices described under Art. 25(3) DSA such as ambiguous and misleading information about prices and products as well as termination of the service;
- Protection of minors (Art. 28), where measures to ensure a high level of privacy, safety and security have not been put in place according to the BEUC, and there is no self-declaration of age, leaving the BEUC to believe that Temu is accessible to minors, and;
- Terms & Conditions (Art. 14) and information about out-of-court dispute resolution (Art. 21), where no or insufficient clear information on the internal complaint-handling mechanism and out-of-court dispute resolution is provided according to the BEUC.
Additionally, concerns have been raised about Temu's ability to be in a position to comply with its obligations as a Very Large Online Platform when designated as such.
The call for action raises several interesting aspects of DSA's application, which, as of 17 February 2024, applies to all platforms. We will, therefore, monitor the development closely.
If you have any questions or concerns about your company's compliance with the DSA and marketing law, please get in touch with My Janse at my.janse@synch.law.
You can read the BEUC's report as well as the Swedish complaint in full here:
Sveriges Konsumenter anmäler Temu för brott mot nya EU-lagen DSA
