Temu faces legal challenge over 'manipulative practices'

Temu faces legal challenge over ‘manipulative practices’

Posted by Admin May 15, 2024 Tech

Temu is facing a fresh legal complaint filed by 17 companies in the European Union.

The Chinese online retailer is accused of “failing to protect consumers” and “using manipulative practices which are illegal under recent EU legislation”, according to consumer group BEUC.

Temu was only launched in September 2022, but has quickly become one of the most popular online marketplaces worldwide.

In the UK, it was the most downloaded app in 2023 and remains high in the Apple app store charts but it is now facing difficulties in the EU.

The legal complaint alleges the company is breaking new rules that mean no matter where the company is based, products have to comply with European law if they sell to European consumers.

Consumer group Which? found weapons for sale on the marketplace and heaters that “could explode” but now warns UK companies do not have the ability to challenge the Chinese retailer.

“It is positive to see other consumer groups across Europe joining together to hold Temu to account for failing to prevent unsafe products ending up in people’s homes,” said Which?’s director of policy and advocacy Rocio Concha.

“However, the UK risks being left behind as weak consumer protection laws make it more difficult to take effective action against Temu and other online marketplaces.”

‘Some Temu traders untraceable’

The legal complaint accuses the company of “manipulative practices” like making it harder to delete your account than to set it up, and misleading customers on pricing.

It also accuses Temu of allowing some of its traders to be untraceable by consumers, which is against EU laws.

“Temu fails to know the traders selling on its platform and may not be in a position to ensure that all the products sold by those traders comply with EU standards,” reads the complaint.

‘Unclear why some products recommended’

It also alleges Temu is not clear enough about why certain products are recommended to users, which is also against EU law.

Temu told Sky News in a statement: “Our commitment to compliance and our willingness to engage stakeholders globally can be seen in our proactive actions.

Cease-and-desist declaration

“In the past week, Temu entered a cease-and-desist declaration with Germany’s [Federation of German Consumer Organisations], committing to addressing concerns raised about our practices.

“Additionally, on Monday, Temu signed a product safety pledge with South Korea’s Fair Trade Commission, committing to a comprehensive system to detect, prevent, and remove unsafe products from circulation.

“Regarding the BEUC complaint, we take it very seriously and will study it thoroughly. We hope to continue our dialogue with the relevant stakeholders to improve Temu’s service for consumers.”