The European Commission has slapped Chinese e-commerce giant Temu with a €200 million fine for failing to stem the flow of illegal goods on its platform. The penalty, the largest ever imposed under the Digital Services Act, comes as British regulators watch from the sidelines, their own powers still constrained by the post-Brexit rulebook.
Senior Whitehall sources tell me the mood in Westminster is increasingly frustrated. One Home Office figure described the current framework as a “paper tiger”, unable to match Brussels’ bite. The Online Safety Act, flagship legislation from the last government, was meant to draw a line under the Wild West of the internet. But critics argue it focuses too heavily on social media platforms, leaving marketplaces like Temu in a regulatory blind spot.
“Temu is a case study in how not to regulate,” a Number 10 insider told me this morning. “They have algorithms that turbo-charge sales of counterfeit and dangerous products. And what do we do? We ask nicely.”
The EU’s move has re-energised a cross-party alliance of MPs pushing for a crackdown. Labour’s Lucy Powell, chair of the Digital, Culture, Media and Sport Committee, has already tabled a series of amendments to the Data Protection and Digital Information Bill. Her argument is simple: if a platform can’t police itself, the state must do it for them.
Downing Street is wary. They fear a regulatory arms race with Brussels that could damage trade ties. But the political calculus is shifting. Recent polling by YouGov suggests 72% of voters want tougher action on online illegal goods, with all main parties backing stronger enforcement.
The Department for Science, Innovation and Technology has been tasked with reviewing the Online Safety Act. A Whitehall source said the review would “look at whether new categories of platform need to be designated”. That’s Whitehall-speak for “Temu is next in the firing line”.
Temu, for its part, is playing the victim. A spokesperson called the fine “disproportionate” and vowed to appeal. In a leaked internal memo seen by this bureau, executives described the EU action as “protectionist” and hinted at a plan to challenge the ruling at the European Court of Justice. The company has also launched a charm offensive in London, hiring former Cabinet ministers to lobby MPs.
But the mood in Parliament is ugly. One Conservative backbencher, a former trade minister, told me: “We’re being played. They flout our laws, rack up fines in Europe, and then hire our own to water down the response. Something has to give.”
The £200m EU fine is a splash of cold water. But Westminster’s reaction suggests the real reckoning is still to come. Whether ministers have the stomach for a full-blown confrontation with one of the world’s biggest retailers remains to be seen. But the backbenchers are circling. And in this game, that’s usually when the knives come out.
