The European Commission has imposed a €200 million fine on Chinese e-commerce platform Temu for violating the Digital Services Act (DSA) by inadequately assessing systemic risks posed by illegal and unsafe products sold across the European Union. This fine is the largest penalty to date under the DSA, surpassing the €120 million fine imposed on Elon Musk’s platform X in December 2025 for transparency violations.
What happened
On June 27, 2026, the Commission announced that Temu failed to properly evaluate risks related to illegal and unsafe products available on its platform. The regulator highlighted shortcomings tied to Temu’s recommendation algorithms and its influencer affiliate program, which pays commissions to creators promoting products. This marks the first time the Commission recognized influencer marketing as a risk factor under Article 34(1)(a) of the DSA.
The Commission’s findings were based on a mystery shopping investigation and supported by data from EU customs and market surveillance authorities showing high rates of non-compliance. The investigation revealed that a significant number of phone chargers tested failed basic electrical safety standards, while many baby toys posed medium to high safety hazards, including excessive chemical content and choking risks. Independent tests by the European consumer organization BEUC found toys with phthalate levels up to 240 times over legal limits sold on Temu. BEUC’s complaints helped trigger the Commission’s probe.
Temu stated it disagrees with the decision and considers the fine disproportionate, noting that the penalty relates to its first DSA assessment in 2024 and does not reflect current improvements. The company said it has worked constructively with the Commission and taken steps to strengthen its risk management and user protections.
Why it matters
This penalty underscores the EU’s intensified enforcement of digital platform obligations under the DSA, emphasizing that risk assessments are critical safeguards rather than mere compliance formalities. The decision signals regulators’ intent to hold platforms accountable not only for direct harms but also for how they monitor and mitigate risks arising from algorithmic recommendations and affiliate marketing programs.
The ruling against Temu also highlights concerns about unsafe imported products proliferating via online marketplaces, addressing consumer safety and compliance gaps that have persisted across cross-border e-commerce. Additionally, scrutinizing influencer affiliate programs as vectors for product risk expands regulatory expectations for platforms to oversee the ecosystem of external promoters.
Background
The Digital Services Act, enforced starting in 2024, introduces platform-level responsibilities for managing illegal and harmful content and products, including risk assessment and mitigation requirements. Temu is among several large Chinese e-commerce platforms under EU scrutiny; others like AliExpress and Shein have faced or continue to face investigations related to risk management, advertising transparency, and platform governance.
The Temu fine is one of four ongoing European Commission investigations opened in October 2024 covering additional areas such as addictive design features and recommender system transparency. Temu must submit an action plan by August 28 detailing remedies to its risk assessment failures. The Commission will then issue an opinion and decide on enforcement measures including timelines for compliance.
Sources
This article is based on reporting and publicly available information from the following source:
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