Temu, the online retailer known for its wide range of low-priced products, is under investigation for allegedly violating consumer rights. Its aggressive sales model, which includes flashy temporary offers and opaque product descriptions, among others, could be in breach of European consumer protection regulations.
Against this backdrop, the European Union Consumer Protection Cooperation Network (CPC), the European Union’s Consumer Protection Network (CPC)[1]together with national authorities in Belgium, Germany and Ireland, as well as the European Commission, have launched several investigations.
Temu’s suspicious business practices
The CPC initiated, together with the national authorities of Belgium, Germany and Ireland, an investigation that is coordinated by the European Commission.
Temu’s business practices under investigation include several aspects that could be detrimental to consumers. Some of these are detailed below:
- False discounts: the store could be giving the false impression of offering discounted products when, in reality, these prices would be normal.
- Pressure Selling: Use of aggressive tactics to pressure consumers to complete their purchases. This includes false claims about product availability or limited timeframes that are untrue.
- Forced promotion of gambling: Temu would force consumers to participate in games, such as “spin the wheel of fortune”, to access its platform, while hiding relevant information about the terms of use linked to the game’s rewards.
- Lack of information or misleading information: the platform would display incomplete and incorrect information about consumers’ rights to return products and receive refunds. Temu also fails to inform in advance that your order must reach a certain minimum value before the purchase can be completed.
- Fake reviews: the authenticity of the reviews posted on Temu’s website has been called into question, which could be misleading as to the quality of its products.
- Hidden contact details: consumers find it difficult to contact Temu with questions or complaints, making it difficult to resolve problems.
These practices would contravene several European Directives, such as the Unfair Commercial Practices Directive [2].[2]on consumer rights[3]on price indication[4]on electronic commerce[5] and on unfair contract terms[6].
The European Commission and the Digital Services Regulation
In addition to the above investigation, the European Commission initiated formal proceedings against Temu in connection with the DSA(Digital Services Act).[7]. This regulation has caused a great stir in the digital market, as it imposes greater obligations on online platforms to increase transparency and ensure the identification and removal of illegal content circulating on these platforms.
Since Temu is a ” Very Large Online Platforms” (VLOP), it faces additional obligations due to the risks that its use could pose to users’ fundamental rights. Among other things, it must submit to external audits and provide access to data requested by researchers.
On October 31, 2024, the European Commission opened a formal procedure to assess whether Temu has complied with the requirements of the DSA, especially with regard to risk management, transparency of recommendation systems and access to its data.
Investigations at national level
Temu is also being investigated by various national authorities such as the Hungarian Competition Authority, the Polish Competition and Consumer Protection Office, and the Directorate General for Competition Policy, Consumer Affairs and Fraud Control in France, which are not indifferent to its commercial practices.
A complicated outlook for Temu
The national investigations, the Commission’s investigation and the CPC Network’s investigation are independent but complementary. Together, they are shedding light on Temu’s practices from different perspectives, putting the company in the spotlight for its infringements. So…it looks like Temu is on its way to racking up almost as many violations as it has products.
We will keep you informed.
[1] The CPC is a network of authorities responsible for the enforcement of EU consumer protection legislation that coordinate to solve cross-border consumer protection problems.
[2] Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (Unfair Commercial Practices Directive).
[3] Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council.
[4] Directive 98/6/EC of the European Parliament and of the Council of 16 February 1998 on consumer protection in the indication of the prices of products offered to consumers.
[5] Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce).
[6] Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.
[7] Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a single market for digital services and amending Directive 2000/31/EC (Digital Services Regulation).
