Temu joins Shein in facing stricter regulation in the EU

Temu, the popular Chinese shopping platform, is about to face stricter EU regulations after the European Commission deemed it a Very Large Online Platform (VLOP) under the Digital Services Act (DSA).

According to the Commission, Temu has confirmed that it has more than 45 million monthly users in the EU, the threshold for being considered a VLOP. That means it’ll have to comply with the strictest rules under the DSA, particularly around assessing “systemic risks” associated with its services, such as counterfeit goods, illegal products, and items that infringe on intellectual property rights.

Temu is the latest retailer to get hit with stricter regulations under the DSA. The Commission did the same for Shein, a popular fast fashion company, just last month. The move also comes just two weeks after other European consumer organization BEUC and 17 of its member groups filed a complaint against Temu. The complaint alleged that the company failed to be transparent with consumers about its algorithm or where its products come from and used manipulative gamification tactics to get consumers to spend more.

Temu will have four months to provide an initial systemic risk assessment report to the Commission, which it will have to submit annually going forward. The regulations also require Temu to put in place more consumer protection measures, as well as publish transparency reports on content moderation every six months.

While these regulations are mostly focused on EU consumers, Temu’s also facing increased scrutiny in the US. Lawmakers reportedly pushed for a potential import ban on Temu in February, citing forced labor concerns with its suppliers.