Temu faces €200m penalty for failing to stop sale of dangerous products

The European Commission has found that shoppers on Chinese retailer Temu are very likely to find items, including fashion and jewellery, that are deemed unsafe or dangerous – and has imposed a €200 million (£173 million) fine on Temu.

The penalty was imposed following a 19-month investigation by the European Commission, which found that consumers were extremely likely to find illegal or unsafe products, including clothing made with banned chemicals and jewellery containing dangerous metals such as lead, on Temu's website.

The Commission specifically said the company had "failed to diligently identify, analyse and assess the systemic risks" of products sold on its website and the subsequent harm they could cause shoppers.

This is the second highest-ever fine imposed under the EU Digital Services Act (DSA). Last December, it issued Elon Musk's X with a €120 million fine over its lack of transparency over advertising.

Under the DSA, which applies to the world’s biggest tech companies, a company can be fined up to 6% of global turnover. Temu's fine represents significantly less than that, as far as a financial report by Temu's parent company, PDD Holdings, shows. The company reported $54 billion (£40 billion) in revenues in 2024, although this encompasses revenues of other companies within the PDD umbrella.

Apart from paying the fine, Temu now has until 28 August to present an action plan to address the failures outlined by the Commission. The Commission then has two months to decide whether Temu has done enough to comply with its rulings.

Temu stated that it did not agree with the Commission's decision and considered the fine to be disproportionate.

The EU Commission's ruling does not have a direct effect on its UK operations or consumers, but could potentially trigger intensified regulatory scrutiny by the government.

Temu is also currently locked in a High Court trial with rival Shein, which has accused Temu of copyright infringement "on an industrial scale", with Temu countering the claim.