ACM and European consumer authorities: Temu must comply with EU consumer protection rules

The European consumer authorities are calling on Chinese online store Temu to bring its practices in line with EU consumer protection rules. Temu has been given one month to respond and indicate how it will adjust its business practices, and also how it will report about this to the European consumer authorities. It was decided to take a joint action with all European consumer authorities because Temu has committed the same violations in all European countries. The Netherlands Authority for Consumers and Markets (ACM) takes part in this action.

Manon Leijten, Member of the Board of ACM, adds: “As the rights of all consumers in the European Union are violated, it is important to take a stand together. Collectively we need to ensure that this ends. That will benefit consumers as well as online retailers that do comply with the rules.”

What business practices must Temu adjust?

The European consumer authorities have pointed out to Temu the following possible violations:
 

• Fake discounts (offering something as a discount, while that is not the case);
• Using countdown timers and scarcity notifications to put pressure on consumers to make a purchase;
• Exerting pressure through the use of game elements without any information about the rewards (gamification);
• The lack of essential information regarding purchase-related aspects such as the right to return, and refunds;
• Providing insufficient information about the way in which Temu guarantees the authenticity of reviews;
• Hiding contact information, thereby making it hard for consumers to contact customer service;
• Other matters such as the lack of information about the contact details of third parties that sell through the platform, product reviews, and misleading sustainability claims.

Temu is given one month to respond and indicate how it will adjust its business practices. If Temu fails to do so sufficiently (or fails to do so at all), the national authorities may launch a follow-up procedure and impose sanctions.

European collaboration

The European consumer authorities and the European Commission work together in the CPC network (Consumer Protection Coordination). The goal is to ensure that companies that are active in different European countries comply with the rules that protect consumers. This case is led by Belgium, Germany, and Ireland.

Since Temu has been designated as a Very Large Online Platform (VLOP), another action is underway, this one on the basis of the European Digital Services Act (DSA), to see whether Temu complies with the rules of the DSA. The European Commission recently issued a press release. In this action, emphasis is on the sale of illegal / unsafe products, addictive design (game-like reward programs), recommendation systems, and granting independent researchers access. The European Commission sees to it that these two actions are mutually coordinated.