The European Commission said on Monday it had accepted Chinese online retail platform Temu's action plan to remedy a breach of the EU's Digital Services Act, following a fine imposed on the company in May, Reuters reported. Yaani, the €200 million fine means 20 crore euros — about $224 million (about 22.4 crore dollars) — and it remains in place while Temu carries out the plan.
Source: Reuters via Devdiscourse
The plan focuses on five measures to remedy the breach, and Temu now has four months to conduct an interim risk assessment, the Commission said. Under the plan, Temu offered to assess its content moderation limitations and look into how its user recommendation software could amplify the spread of illegal goods on its platform, the Dow Jones / Wall Street Journal report on the Commission's announcement said.
Source: Dow Jones via Morningstar
The Commission fined Temu — a subsidiary of PDD Holdings — €200 million in May, saying European consumers were very likely to come across illegal goods on the platform. Under the Digital Services Act, companies classed as very large online platforms must carry out risk assessments to ensure their services are safe; the Commission started investigating Temu under the DSA in 2024 and said its 2024 risk assessment fell short of the rulebook's standards.
What Temu must now do
The accepted plan also includes a pledge to carry out a platform-specific risk analysis, use reliable metrics to gauge how effective Temu is at reducing the risk of illegal content being spread online, and examine the influence of sellers exploiting Temu's features to spread potentially illegal sales listings. The Commission said the company now has four months to conduct a fresh interim risk assessment covering a six-month period.
A Temu spokesperson said it welcomed the Commission's approval and that its action plan reflects an enhanced risk assessment methodology "that has evolved significantly since the obligation first became applicable to us in 2024." Reuters noted that Temu, along with Shein and other e-commerce platforms, has also been hit by the EU imposing €3 fees on low-value e-commerce packages since the start of July; parcels worth less than €150 previously entered the bloc duty-free. Accepting the plan is not a clean bill of health — it sets out what Temu must fix, and the assessment due in four months will show whether it did.