The European Union (EU) has commenced formal proceedings against the Chinese shopping website Temu, over concerns illegal products are available to buy on its site.

The Guardian reports that the European Commission opened a formal investigation on October 30, citing concerns that the cut-price rival to Amazon is failing to stop the sale of counterfeit products, pharmaceuticals, cosmetics and toys. The Commission said that Temu, owned by PDD Holdings, does not have sufficiently robust systems in place to stop the reappearance of “previously suspended rogue traders,” with products coming back online sometimes within days of being removed, and was breaching the new Digital Services Act (DSA), which regulates tech firms.

Concerns have been raised by various authorities across Europe, particularly in Germany, Denmark and Ireland, where the company is headquartered in the EU.

The investigation will focus on the systems Temu has in place to limit the sale of non-compliant products in the European Union and the risks linked to the addictive design of the service, including game-like reward programs. Additionally, the EC will investigate Temu’s compliance with its DSA obligations linked to how Temu recommends content and products to users, as well as its obligation to give researchers access to Temu's publicly accessible data.

Temu was designated as a Very Large Online Platform (VLOP) on 31 May 2024 under the EU's Digital Services Act, following its declaration of having more than 45 million monthly active users in the EU. Four months from its designation, Temu had to comply with the most stringent obligations applicable to VLOPs, as set out in the DSA. These include the obligation to duly assess and mitigate any systemic risks stemming from its service. Temu last declared 92 million monthly users in September 2024.