EU imposes stricter regulations on budget retailer Temu.
Temu is under fire for resorting to tactics designed to extract money from consumers on its online marketplace. The European Commission is examining the Chinese e-commerce platform closely. Fines for flouting EU regulations would be severe for Temu down the line.
The European Commission is also tightening the reins on the Chinese e-commerce giant Temu. It officially categorized Temu as a significant online platform under the Digital Services Act (Digital Services Act - DSA). Temu claims to have 75 million users in the EU.
The platform well surpasses the 45 million users benchmark at which the DSA takes effect. Therefore, Temu is required to implement extensive measures within four months, until the end of September, to safeguard against issues such as counterfeit products and intellectual property infringements. Additionally, it must submit annual risk evaluation reports, prioritizing potential concerns relating to the well-being of consumers, specifically focusing on children.
Temu lures customers with jaw-dropping discounts but routinely receives negative feedback for poor quality, items that never materialize, and, most notably, the staggering environmental footprint of its products.
Consumer groups in various European nations registered complaints against the platform in mid-May. The platform is "teeming with manipulative strategies aimed at encouraging consumers to spend more on the platform." To close your account on Temu, you must navigate a "mystery path" on their website. On top of that, Temu tends to leave customers in the dark about the individual behind their purchases.
The DSA's regulations for digital titans apply to 24 significant online services, encompassing e-commerce giants like Amazon and Zalando, as well as platforms such as Google Maps, Facebook, TikTok, and X. At the end of April, Brussels classified the Chinese online retailer Shein as a major online platform.
If companies breach the rules, penalties may skyrocket to six percent of their global yearly revenues. Repeated rule infractions could lead to an outright ban from operating in the EU, as per the DSA.
A Temu representative declared on Friday that the organization had acknowledged their classification. Temu vowed to "follow the rules and regulations set forth in the DSA to guarantee the security, openness, and protection of our European Union users."
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Despite the EU's tightened regulations, Temu continues to attract users through Online shopping, offering appealing discounts. However, Chinese e-commerce giant Temu faces criticism for its involvement in Online trading that involves questionable business practices and environmental concerns, leading to user complaints.
