Temu, the tremendous low-cost e-commerce market owned by Chinese language on-line retailer Pinduoduo, is to face the European Union’s strictest guidelines after authorities designated the corporate a “very giant on-line platform” (VLOP) below the Digital Companies Act (DSA).
The information comes some two weeks after European shopper safety teams filed coordinated complaints towards Temu over an alleged raft of alleged breaches regarding DSA, and a 12 months after Temu opened its first workplace within the area. Temu subsequently went on to go 75 million customers within the EU, in line with some studies, a determine that sits properly above the EU’s 45 million threshold for being classed as a VLOP.
Extra scrutiny
The principles set out below the DSA have utilized since February with 19 separate platforms initially topic to further scrutiny both as a VLOP or very giant on-line search engine (VLOSE), masking merchandise belonging to Alibaba, Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft, and Snap, amongst others. In December, an further three porn websites got VLOP standing forward of the official utility date, whereas Temu’s Chinese language retail rival Shein was the primary to be designated a VLOP after the foundations got here into apply.
Temu is now the twenty fourth firm to face further obligations below the DSA, which means the corporate will face further scrutiny over its use of algorithms, AI, content material rankings, suggestion instruments, and suchlike, whereas having to evaluate and mitigate any “systemic dangers” that stem from Temu’s companies, together with addressing counterfeit, unlawful or unsafe merchandise listed on its platform.
In mid-Might, BEUC — the European shopper group representing 45 shopper safety teams throughout the bloc — filed a proper criticism towards Temu whereas requesting that lawmakers designate the platform as a VLOP. In tandem, greater than a dozen BEUC member organizations filed complaints with their nationwide shopper safety authorities, accusing Temu of breaching DSA.
And it appears the European Fee has listened.
Whereas the extra guidelines that apply to VLOPs are formally binding from August for corporations which have already been designated as such, Temu could have till the tip of September as a result of there’s a four-month grace interval to conform from the purpose of notification — beginning immediately.
From that time, Temu might want to work with the Fee and Irish Digital Companies Coordinator — Temu’s European HQ is in Dublin — to offer common threat evaluation studies, as soon as initially, after which on a yearly foundation transferring ahead.
TechCrunch has reached out to Temu for remark, and can replace right here if or after we hear again.
