Temu faces a fine running into millions

The European Commission, acting as the supervisory authority under the DSA, has shown its teeth by imposing the highest fine to date under the DSA on Temu.

DSA

The Digital Services Act (‘DSA’) came into force on 25 August 2023. The DSA applies to a wide range of businesses, including internet service providers, online marketplaces, search engines and social media companies. The DSA is aimed in particular at Very Large Online Platforms (known as VLOPs) with more than 45 million users in the European Union, such as Facebook, Instagram, TikTok, X, Snapchat and marketplaces such as AliExpress, Booking.com, Zalando, Amazon and Temu.

The DSA obliges these parties to combat illegal content and disinformation, to adjust recommendation systems and to be transparent about advertising. VLOPs are also required to comply with the rules of the Digital Services Act, such as the obligation to properly assess and mitigate all systemic risks arising from their services, including the listing and sale of counterfeit goods, unsafe or illegal products, and items that infringe intellectual property rights.

Enforcement by the European Commission

The European Commission oversees the enforcement of the DSA. If the European Commission considers that the DSA is being breached, an investigation is launched and relevant information is gathered, following which a decision is taken. In December 2025, the European Commission imposed an initial fine of €120 million on X under the DSA for breaching the DSA. X was accused of using blue tick marks on its platform in a misleading manner. In addition, X was accused of a lack of transparency regarding its advertising register and of providing inadequate access to public data for researchers. The latter is necessary to enable the targeted detection of scams, hybrid threat campaigns and fake advertisements. TikTok has also already received a warning from the European Commission under the DSA for failing to comply with regulations regarding the advertising register. It was also recently revealed that a European Commission investigation under the DSA into Shein is ongoing, partly due to the addictive nature of the platform.

Investigation into Temu

The European Commission has been investigating the Temu platform since 2024 and is now imposing the highest fine for a breach of the DSA on Temu. The European Commission’s investigation has found that the analysis of systemic risks on the Temu platform falls short in several areas. In particular, the European Commission considers that Temu:

• has paid insufficient attention to the specific risks associated with the products and services offered on the Temu platform;
  
• has done too little to identify, analyse and counter systemic risks posed by illegal products offered on the platform, resulting in harm to consumers in the European Union. The European Commission states that it has received information from customs and market surveillance authorities and has obtained evidence through mystery shopping on Temu’s platform that various products pose excessive risks. For example, a high percentage of the chargers offered on the platform reportedly fail to meet basic safety requirements. The same applies to baby toys offered on the platform, which contain excessive levels of chemical materials and components that pose an increased risk of suffocation;
  
• has failed to properly investigate how the design of its services – including recommendation systems and promotional programmes run in collaboration with influencers – increases the risk of illegal products being distributed.

Conclusion

Temu now has the opportunity to respond to the European Commission’s fine and to draw up an action plan to mitigate the systemic risks. Should Temu fail to do so as required by the European Commission under the DSA, further enforcement action is to be expected. Temu has already stated that it considers the findings of the investigation to be unfounded and regards the fine as disproportionate. Legal proceedings before the Court of Justice therefore seem likely.

It is clear, however, that the European Commission does not hesitate to take enforcement action under the DSA against major online platforms, including VLOPs from the United States and China that offer their products and services within the European Union. For companies offering digital services within the European Union, this is an important signal that DSA compliance is becoming an increasingly high priority. We expect to see more investigations and enforcement measures in practice in the near future. Organisations would therefore be well advised to assess in good time which obligations apply to them and whether their processes are aligned with these requirements.

Would you like more information?

If you would like to know more about the DSA and the resulting rights and obligations, please contact Lex or one of the other professionals from our tech team.