On 28 May, the Commission fined Temu €200 million under the Digital Services Act (DSA), its largest penalty to date under the regulation. The Commission found the tech giant to be in breach of the risk assessment requirements for illegal products under the DSA’s rules concerning Very Large Online Platforms (VLOPs). This enforcement action marks a long-awaited moment in EU policy enforcement and contributes to creating a more level playing field between EU-based and non-EU-based companies.
The grounds for the fine
Temu was designated a VLOP under the DSA in May 2024, which triggered the requirement to conduct annual risk assessments of its service. The Commission opened formal proceedings in October 2024, targeting Temu’s risk assessment report provided at the end of September 2024. The report was found to fall far below standards, as it underestimated the prevalence of illegal products on the platform, lacked specificity and, overall, left regulators without a clear picture of the scale of potential harm.
Mystery shopping exercises carried out by the Commission before issuing the preliminary findings in July 2025 revealed that a high proportion of selected chargers failed safety tests and many baby toys contained chemicals exceeding safety standards or presented choking hazards. The Commission found that Temu’s recommender systems and promotional tools made non-compliant products more accessible to consumers, compounding the underlying risk. Executive Vice President Henna Virkkunen deemed the infringement as “very serious”, underlying proper risk assessment as the basic step to access the European market as an online platform.
The penalty
At €200 million, the fine is notably below the DSA’s maximum threshold of 6% of global revenue, which on Temu’s estimated 2025 turnover of €53 billion would amount to roughly €2.8 billion. Temu now has until 28 August 2026 to submit an action plan to the Commission on how it will remedy the breach of its risk assessment obligations, as required under Article 75 of the DSA. The European Board for Digital Services will then have one month to issue its opinion, after which the Commission has a further month to adopt its final decision and set a deadline for implementation. The fine was issued alongside a non-compliance decision, marking one of the final steps in the formal proceedings opened by the Commission in October 2024. Temu retains the right to appeal the decision before the EU Court of Justice. In the meantime, failure to comply with the non-compliance decision may lead to additional penalty payments.
It is worth highlighting that the Commission’s investigation into addictive design remains open with a pending decision.
E-commerce Level Playing Field
Ecommerce Europe and its members have argued that non-compliant companies benefit from an unfair competitive advantage, in part because enforcement of EU rules against them has been slow and insufficiently coordinated. In our open letters on the level playing field, we highlighted that compliant businesses invest heavily in meeting regulatory requirements, while non-compliant actors can reduce their price by an estimated 40%, creating a competitiveness gap. The Temu fine shows that the DSA framework can be used as a meaningful tool against non-compliant companies that do not meet their obligations.
That said, Ecommerce Europe has consistently stressed that speed is key. We will closely monitor the follow-up actions taken by the Commission and will continue to push for faster, more coordinated enforcement across Member States and EU institutions.