The European Commission is preparing an investigation against the Chinese online shop Temu due to concerns that the platform is not adequately addressing the sale of illegal products. Under the Digital Services Act, the investigation could lead to fines of up to 6% of Temu's global annual revenue, reported two EU officials.

On Wednesday, the Commission announced that the investigation could start in the coming days. This follows a request to Temu to provide detailed information on measures to curb illegal items, as well as risks in the areas of consumer protection and public health. Temu responded on Friday, stating that the answers are currently being analyzed, which could lead to an official investigation, but no final decision has yet been made.

The concerns are primarily about the high number of dangerous products on platforms like Temu and Shein. A recent survey showed that 80% of toys tested on Temu contained toxic substances or posed health risks to children. Consumer groups criticize that such platforms bypass EU safety and consumer protection regulations by selling directly to customers.

Currently, several large online providers are under increased scrutiny in Brussels. In addition to Temu, investigations have already been launched against Meta, AliExpress, TikTok, and X. The Digital Services Act, passed in 2022, gives the Commission extensive powers to penalize large online companies for failing to monitor illegal content on their platforms.

Temu, founded in 2022, has expanded to nearly 50 countries in a short time, supported by an ultra-low price strategy. Despite rapid growth, initial cracks are appearing, as evidenced by the 18% drop in the share price of parent company PDD Holdings in August following disappointing sales figures of 97.1 billion RMB ($13.6 billion USD) for the quarter ending in June.

The European Commission has already classified Temu as a "Very Large Online Platform" in June, which means more intensive monitoring. If the investigation begins, proceedings could be stopped at any time if Temu agrees to take stricter measures against the sale of illegal goods.