Ago joins Shein in the face of tighter regulations in the EU

Ago, a popular Chinese shopping platform, will soon face stricter EU regulations after the European Commission designated it as a very large online platform (VLOP) under the Digital Services Act (DSA).

According to the Commission, Temu has confirmed that it has over 45 million monthly users in the EU, which is the threshold for being considered a VLOP. This means it will have to comply with the strictest rules under the DSA, particularly in assessing the “systemic risks” associated with the services it provides, such as counterfeit goods, illegal products and items infringing intellectual property rights.

Ago is the latest retailer to be hit by tighter regulations under the DSA. Just last month, the Commission did the same with Shein, a popular fast fashion company. The move comes just two weeks after fellow European consumer organization BEUC and 17 of its member groups filed a complaint against Temu. The complaint alleged that the company failed to provide consumers with transparency about its algorithm or the origins of its products and used manipulative gamification tactics to induce consumers to spend more money.

It will have four months to submit to the Commission an initial report on the systemic risk assessment, which it will have to submit annually in the future. The regulations also require Temu to introduce more consumer protection measures, as well as publish transparency reports on content moderation every six months.

While these regulations mainly focus on EU consumers, they are also under increased scrutiny in the US. In February, lawmakers reportedly pushed for a potential Temu import ban, citing suppliers’ concerns about forced labor.