Following investigation at European level, the Consumer Protection Cooperation (CPC) Network of national consumer authorities and the European Commission have notified the online marketplace Temu that some of its practices infringe EU consumer law. The CPC Network directed Temu to bring those practices in line with EU consumer laws. Temu remains under investigation and was requested to provide further information to the network. The action is being led by the consumer bodies in Ireland, Belgium and Germany, under the coordination of the European Commission.
The investigation covers a broad range of practices, considered to be “online choice architecture” or “dark patterns”, some of which may mislead consumers or unduly influence their purchasing decisions. The CPC Network is also investigating whether Temu complies with specific information obligations for online marketplaces under consumer law.
Separately, the European Commission has opened formal proceedings against Temu under the Digital Services Act. In addition, from 13 December onwards, the General Product Safety Regulation (GPSR) will require that there is an economic operator established in the EU who is responsible for ensuring compliance with product safety requirements, including specific obligations for online marketplaces that target consumers. Under the GPSR, the national market surveillance authorities can issue a takedown order to take the product off the internet if they identify that it is unsafe.
The CPC Network identified several types of problematic practices on the Temu platform, which they consider to be in breach of EU consumer protection laws, such as:
- Fake discounts: giving the false impression that products are offered with a discount where there is none.
- Pressure selling: putting consumers under pressure to complete purchases using tactics like false claims about limited supplies or false purchase deadlines.
- Forced gamification: forcing consumers to play a ‘spin the fortune wheel’ game to access the online marketplace, while hiding essential information about the conditions of use linked to the rewards of the game.
- Missing and misleading information: displaying incomplete and incorrect information about consumers’ legal rights to return goods and receive refunds. Temu also fails to inform consumers in advance that their order needs to reach a certain minimum value before they can complete their purchase.
- Fake reviews: giving inadequate information about how Temu ensures the authenticity of reviews published on its website. National authorities found reviews which they suspect to be unauthentic.
- Hidden contact details: consumers cannot easily contact Temu about questions or to make complaints.
In addition, the CPC Network has asked for more information from Temu to assess if it is complying with further consumer law obligations, such as the obligation to inform consumers clearly whether the seller of a product is a trader or not; to ensure that product rankings, reviews, and ratings are not presented to consumers in a misleading manner; to ensure that price reductions are announced and calculated correctly; and to ensure that any environmental claims are accurate and substantiated.
Next steps
Temu now has one month to reply to the CPC Network’s findings and make proposals about how they will address the identified consumer law issues. Depending on Temu’s reply, the CPC Network may enter into a dialogue with the company. If Temu fails to address the concerns raised, national authorities can take enforcement measures to ensure compliance. This includes imposing fines based on Temu’s annual turnover in the member states concerned. This is without prejudice to the power of national authorities to take enforcement measures in ongoing proceedings.
