The Chinese online stores Temu and Shein must inform the European Commission before July 12 to what extent they comply with the Digital Services Act rules. This information request follows a complaint that European consumer organizations filed against Temu in April.
Temu and Shein must inform the European Commission what measures they have taken to comply with the obligations of the Digital Services Act legislation. The EC wants to know, among other things, whether the platforms have a mechanism that allows users to notify stores if illegal products are being sold. Temu and Shein must also prove that they do not use dark patterns in the interface, that they protect minors, that buyers are traceable and that the recommendation system is transparent.
The companies must comply with the information request before July 12. Based on the information provided, the EC determines whether further steps will be taken. Temu and Shein were designated as very large online platforms under the DSA earlier this year, meaning they now have to meet stricter requirements. If companies do not meet these requirements, they can be fined up to six percent of their global annual turnover. Both parties told Reuters that they intend to work closely with the Commission and will provide the necessary information.
The European Commission is making this request for information in response to a complaint that seventeen European consumer organizations, including the Dutch Consumers' Association, filed against Temu in April. They stated that the store is in violation of the Digital Services Act. Among other things, too little information is shown about products, sellers and the reason why consumers do or do not see certain products.
Temu is not only under fire in Europe. This week, the Chinese online store was sued in the US state of Arkansas by Attorney General Tim Griffin. He calls Temu “dangerous malware” that secretly collects “almost all the data from the user's phone.” Griffin claims the app has 'unrestricted' access to camera, location, contacts and text messages, among other things.
He also cites a study that suggests the Temu app can steal users' phones 'hacking' to override the privacy settings so that the app can still access certain data. This would allegedly violate the Deceptive Trade Practices Act. If Griffin is proven right, Temu could be fined $10,000 per violation. The company could also be forced to pay back the profits it made from selling illegally collected data.
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