European Union scrutiny of cross-border ecommerce platforms continues as Temu secures approval for a compliance plan tied to its Digital Services Act obligations. The move follows a €200 million fine imposed in May and gives the company four months to complete an interim risk assessment.
Highlights
- The European Commission accepted Temu's five-step action plan to remedy its breach of the Digital Services Act, requiring a four-month interim risk assessment.
- In May, the EU fined Temu €200 million ($224.08 million) for insufficient action against the sale of illegal products on its platform.
- From July, the EU implemented a €3 fee on low-value ecommerce parcels under €150, increasing regulatory pressure on companies like Temu and Shein.
Compliance steps and regulatory timeline
As reported by Reuters, citing the European Commission, Temu's action plan sets out five measures aimed at remedying the breach identified under the Digital Services Act.The Commission, acting as the EU regulator, says the company now has four months to carry out an interim risk assessment. It fined Temu €200 million, or $224.08 million, in May after finding it did not do enough to stop the sale of illegal products.
A Temu spokesperson says the company welcomes the Commission's approval of the plan. Under the measures, Temu will have to assess possible shortcomings in its content moderation system, among other steps.
Wider pressure on low-cost ecommerce platforms
The decision comes as Temu, owned by PDD Holdings, and rivals including Shein face broader EU pressure over low-value online imports.Since the start of July, the EU has imposed €3 fees on low-value ecommerce packages. Parcels worth less than €150 had previously entered the bloc duty-free.
In our earlier article on Malaysia’s tighter oversight of foreign products and e-commerce entrants, we described the government’s plan to coordinate enforcement across ministries to protect local SMEs and ensure fair competition. We also noted parallel steps to strengthen the digital trade framework, including work on an e-Commerce Bill and initiatives to promote local products and help small businesses expand via online platforms.
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