Temu, the 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) beneath the Digital Companies Act (DSA).
The information comes some two weeks after European client safety teams filed coordinated complaints in opposition to 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 response to some studies, a determine that sits properly above the EU’s 45 million threshold for being classed as a VLOP.
Extra scrutiny
The overall obligations set out beneath the DSA have utilized since February, however an extra set of extra stringent guidelines got here into pressure final August, initially impacting 19 separate platforms designated as a VLOP or very giant on-line search engine (VLOSE). This coated merchandise belonging to Alibaba, Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft, and Snap, amongst others. In December, an extra three porn websites got VLOP standing, whereas Temu’s Chinese language retail rival Shein was made a VLOP in April.
Temu is now the twenty fourth firm to face further obligations beneath the DSA, that 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-Could, BEUC — the European client group representing 45 client safety teams throughout the bloc — filed a proper criticism in opposition to 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 client 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 firms which have already been designated as such, Temu may 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 at the moment.
From that time, Temu might want to work with the Fee and Irish Digital Companies Coordinator — Temu’s European HQ is in Dublin — to supply common danger evaluation studies, as soon as in the beginning, after which on a yearly foundation shifting ahead.
“Temu acknowledges the European Fee’s designation of our platform as a Very Giant On-line Platform (VLOP) beneath the Digital Companies Act (DSA),” A Temu spokesperson stated in an announcement issued to TechCrunch. “We’re absolutely dedicated to adhering to the principles and laws outlined by the DSA to make sure the protection, transparency, and safety of our customers throughout the European Union.”
