The European Union has launched a formal investigation into Chinese shopping website Temu, amid growing concerns about illegal products.

The investigation was launched on Thursday, according to a report by The Guardian, citing potential breaches of the Digital Services Act (DSA), which is designed to regulate tech firms and online marketplaces across the EU.

Temu’s rapid growth in the EU market

Since launching in April last year, Temu has quickly grown as a discount alternative to Amazon. With its tagline “shop like a billionaire,” Temu provides a wide variety of goods, ranging from cosmetics and clothing to furniture and tech, all sourced directly from China. The platform is estimated to have around 100 million users, and Temu’s rapid growth in the EU continues, registering 75 million users in April this year, rising to 92 million by September.

According to EU officials, Temu was allowing the sale of illegal products, including counterfeit goods, pharmaceuticals, cosmetics and toys. After being taken down, the items reappeared on the site shortly after, prompting concern from authorities in Germany, Denmark and Ireland.

Temu’s aggressive sales tactics

Further concerns have also been raised regarding Temu’s aggressive sales tactics. The platform has been accused of employing “addictive design” techniques that use game-like Russian roulette rewards to entice consumers. The Temu app also delivers multiple notifications to consumers, encouraging them to shop more and more.

Fernando Hortal Foronda, digital policy officer at the European Consumer Organisation (BEUC), said: “There are many problems consumer groups have identified with Temu, which include many dangerous or illegal products on sale or the frequent use of design techniques to trick consumers. This decision by the commission is a promising step, but only the first.”

The investigation also follows formal information requests sent by the European Commission to Temu and its Chinese rival, Shein, in June. These requests aimed to assess their compliance with obligations to protect children and ensure transparency about the source of the goods sold on their platforms.

Rocio Concha, from the British consumer group Which?, praised the investigation and added that similar issues were prevalent in the UK, but action is hampered by weak consumer protection laws. She commented, “The government must use its product regulation and metrology bill to give online marketplaces greater legal responsibility for preventing unsafe products from being sold on their platforms and to enable tough enforcement action, including heavy fines, if they flout the rules.”

Temu responds to allegations

In response to the investigation, Temu stated: “Temu takes its obligations under the DSA seriously, continuously investing to strengthen our compliance system and safeguard consumer interests on our platform. We will cooperate fully with regulators to support our shared goal of a safe, trusted marketplace for consumers.”

If found in violation of the Digital Services Act, Temu could face hefty fines.