Temu Receives Warning From European Commission and CPC

Alleged Violation of European Consumer Protection Rules

Temu, a sales platform popular in Europe for its competitive prices, has been issued a warning by the European Commission and the Consumer Protection Cooperation Network (CPC), including the Romanian National Authority for Consumer Protection. The warning, issued on November 08, 2024, points out practices that allegedly violate European consumer protection rules. The platform, founded by Chinese billionaire Colin Huang, now has a month to respond to these claims.

Disputed Practices and Accusations of Consumer Manipulation

European authorities and the CPC have highlighted several tactics Temu uses with its users that are considered manipulative and abusive. These include presenting false discounts, applying psychological pressure to prompt quicker purchase decisions, and using gamification techniques that influence buying decisions without offering full information.

A notable example of these tactics is the “spin the wheel of fortune” game that users must access to enter the marketplace. Criticism has been directed at the game for concealing crucial information about the game rules and the conditions for using the incentives received. Additionally, Temu has been accused of showcasing dubious reviews, raising concerns about the platform’s review transparency and fairness.

The Platform’s Obligations Under EU Law

To operate within the EU, Temu must comply with the standards set by EU consumer protection rules. These rules require transparency about the identity of sellers, whether they are authorized traders or individuals, and accurate calculation and presentation of price discounts.

The CPC has requested Temu to provide comprehensive information to prove compliance with EU rules, including data on measures taken against traders selling products illegally. According to the European Commission, the platform must inform users about minimum order limits before finalizing purchases and display genuine, non-misleading reviews. Non-compliance may result in severe sanctions, including fines calculated based on turnover in each European country where Temu operates.

Possible Sanctions and Temu’s Expected Reaction

Temu has a month to respond to the European Commission’s request and suggest remedies for the reported irregularities. Failure to comply with the requirements could result in enforcement action from national authorities, including hefty fines.

As an international platform, Temu is closely monitored by authorities to ensure that its operations do not harm the rights and interests of European consumers. It remains to be seen whether Temu will respond positively to this notification and make the necessary changes to comply with EU rules. If not, the sanctions imposed could severely impact the platform’s operations in Europe, potentially setting a precedent for other international platforms serving the European market.