The European Union has imposed a £170m fine on Temu, the Chinese-owned online marketplace, after an investigation found the platform facilitated the sale of counterfeit and prohibited goods. The penalty, announced by the European Commission on Tuesday, represents the largest such action against an e-commerce company under the bloc’s Digital Services Act.
Separately, the British Competition and Markets Authority has urged the government to tighten regulations on digital marketplaces, stating that current rules are inadequate to prevent the distribution of unsafe or illegal products. In a statement, the CMA said that platforms like Temu must be held “fully accountable” for goods sold through their services, and called for a statutory duty of care to be imposed on operators.
The EU investigation, which spanned 18 months, uncovered thousands of listings for items including counterfeit luxury goods, unauthorised medicines, and electrical products that failed to meet safety standards. Regulators said Temu had failed to take “adequate and proportionate” measures to detect and remove such content, despite repeated warnings.
Temu, which is owned by the Chinese e-commerce conglomerate PDD Holdings, disputed the findings. A company spokesperson said it would appeal the fine, arguing that it had cooperated fully with the investigation and had invested heavily in automated content moderation. “We take our obligations seriously,” the spokesperson said. “But the Commission’s assessment does not reflect the full picture of our efforts.”
The EU’s action is part of a broader crackdown on online marketplaces. Under the Digital Services Act, which came into force last year, platforms designated as “very large” must conduct risk assessments and implement robust systems to tackle illegal content. Temu was classified as such in 2023 due to its size and reach across the bloc.
In London, the CMA’s intervention adds to growing political pressure for a dedicated Online Safety Bill for e-commerce. The government has so far resisted calls for sector-specific legislation, instead relying on the existing Consumer Protection from Unfair Trading Regulations. But critics argue that these rules are ill-equipped to address the scale and complexity of cross-border digital trade.
“The current framework leaves consumers exposed,” said a CMA official, speaking on condition of anonymity. “We need a system where platforms are legally responsible for what is sold on their sites, not just what they know about.” The watchdog has recommended that the government introduce a mandatory code of practice for online marketplaces, with penalties for non-compliance comparable to those now imposed by Brussels.
The fine against Temu is expected to send a signal to other platforms, including Shein and AliExpress, which have faced similar scrutiny. In a separate development, the EU has opened a formal investigation into Shein’s compliance with the Digital Services Act, focusing on its handling of counterfeit goods and child safety.
Analysts say the cumulative effect of these actions could reshape the online retail landscape in Europe. “Platforms can no longer rely on the argument that they are mere intermediaries,” said Dr. Eleanor Frost, a digital trade specialist at the London School of Economics. “The liability framework is shifting, and companies will have to invest significantly in compliance or face substantial fines.”
Temu has three months to pay the fine or lodge an appeal. Meanwhile, the British government is expected to consult on new e-commerce regulations later this year, amid cross-party calls for faster action.
