Temu’s digital strategy under EU scanner: Safety, design issues spark probe

The EU-Temu standoff intensifies arsenic nan European Commission launches a general probe into nan e-commerce platform’s trading practices and personification engagement tactics.

The probe, launched connected October 31, targets everything from nan platform’s addictive reward systems to its merchandise proposal algorithms.

For Temu, whose EU personification guidelines exploded to 92 cardinal monthly progressive users by September 2024, nan investigation spotlights nan increasing hostility betwixt accelerated integer scaling and regulatory compliance. Since its European motorboat successful April 2023, nan platform’s trading playbook has helped it surge past nan 45 cardinal personification threshold, earning it Very Large Online Platform (VLOP) position this May.

Brussels’ investigation specifically questions Temu’s integer engagement strategies, including its gamified shopping acquisition and AI-powered proposal engines – halfway elements of nan platform’s viral maturation successful nan European market.

The investigation besides marks a captious trial of nan EU’s Digital Services Act (DSA), a broad regulatory model designed to guarantee integer platforms run safely and transparently successful nan European market. 

Key areas of investigation

The Commission’s investigation will attraction connected 4 superior concerns:

1. Product compliance and seller verification

The investigation focuses connected Temu’s strategy for preventing nan waste of non-compliant products successful nan EU. Regulators are concerned astir nan platform’s expertise to forestall suspended rogue traders from returning to nan marketplace and extremity nan reappearance of antecedently identified non-compliant goods.

2. Addictive creation features

The Commission scrutinises Temu’s game-like reward programs and different perchance addictive creation elements. There are concerns that these features could negatively effect users’ beingness and intelligence well-being, raising questions astir nan platform’s work to protect user interests.

3. Recommendation systems

The investigation will analyse really Temu recommends contented and products to its users. Under nan DSA, platforms must beryllium transparent astir their proposal algorithms and supply users pinch astatine slightest 1 easy accessible action that isn’t based connected individual profiling.

4. Research information access

The Commission is besides investigating whether Temu has met its obligations to supply researchers entree to publically disposable level data, an basal request for transparency nether nan DSA.

Regulatory model and imaginable consequences

If nan Commission’s suspicions are confirmed, Temu could look important consequences for violating Articles 27, 34, 35, 38, and 40 of nan DSA. Executive VP for Europe Fit for nan Digital Age, Margrethe Vestager, emphasised nan value of compliance, stating: “We want to guarantee that Temu is complying pinch nan Digital Services Act. Particularly successful ensuring that products sold connected their level meet EU standards and do not harm consumers. Our enforcement will guarantee a level playing section and that each platform, including Temu, afloat respects nan laws that support our European marketplace safe and adjacent for all.”

The roadworthy ahead

The Commission’s investigation follows preliminary analyses of Temu’s consequence appraisal study from September 2024 and responses to general accusation requests made successful June and October 2024. While nan investigation has nary group deadline, nan Commission has indicated it will beryllium treated arsenic a priority.

The probe doesn’t automatically bespeak guilt, and Temu will person nan opportunity to reside nan concerns done commitments to remedy nan issues. The investigation will impact gathering further grounds done accusation requests, monitoring actions, and interviews.

Overall, this investigation represents a important trial of nan DSA’s enforcement capabilities and could group important precedents for different online marketplaces operating successful nan EU. It’s worthy noting that nan Commission’s action doesn’t preclude abstracted enforcement measures by nationalist user protection authorities aliases marketplace surveillance bodies, peculiarly nether nan upcoming General Product Safety Regulation, which takes effect connected December 13, 2024.

The lawsuit against Temu demonstrates nan EU’s committedness to enforcing its integer regulations and ensuring that accelerated business maturation doesn’t travel astatine nan disbursal of user information and level responsibility. As nan investigation unfolds, it will apt service arsenic a benchmark for really nan DSA tin beryllium utilized to modulate ample online platforms and protect European consumers successful nan integer marketplace.

(Photo by Christian Lue )

See also: EU cracks down connected Temu and Shein: Compliance pinch DSA nether scrutiny

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Tags: Advertising, ECommerce