China’s e-commerce market Temu is subject to stricter EU regulations as a ‘very large online platform’

Temu, the super-cheap e-commerce marketplace owned by Chinese online retailer Pinduoduo, is set to face the toughest European Union regulations after authorities deemed the company a “very large online platform” (VLOP) under the Digital Services Act (DSA).

The news comes about two weeks after European consumer protection groups filed coordinated complaints against Temu over a number of alleged DSA-related violations, and a year after Temu opened its first office in the region. According to some reports, Temu subsequently surpassed 75 million users in the EU, a number that far exceeds the EU threshold of 45 million for being classified as a VLOP.

Extra control

The rules set out in the DSA have been in place since February, with 19 separate platforms initially subject to additional scrutiny as VLOPs or Very Large Internet Search Engines (VLOSEs), covering products from Alibaba, Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft and Snap, among others. . In December, an additional three porn sites were granted VLOP status ahead of the official application date, with Temu’s Chinese retail rival Shein becoming the first to achieve VLOP status after the regulations came into force.

Temu is now the 24th company to face additional obligations under the DSA, meaning it will be subject to additional scrutiny over its use of algorithms, artificial intelligence, content rankings, recommendation tools etc., while also having to assess and limit any “systemic risks” that may arise from Temu’s services, including those relating to counterfeit, illegal or unsafe products listed on its platform.

In mid-May, BEUC – the European consumer organization representing 45 consumer protection groups across the bloc – filed a formal complaint against Temu, demanding that lawmakers designate the platform as a VLOP. At the same time, several BEUC member organizations filed complaints with national consumer protection authorities accusing Temu of violating the DSA.

And it looks like the European Commission listened.

While the additional rules applicable to VLOP are officially in force from August for companies that have already been designated as such, Temu will have until the end of September as there is a four-month grace period to comply from the time of notification – starting today.

From then on, Temu will need to work with the Commission and the Irish Digital Services Coordinator – Temu’s European headquarters is in Dublin – to provide regular risk assessment reports, initially and then annually thereafter.

TechCrunch has reached out to Temu for comment and will update here if or when we hear back.