- within Corporate/Commercial Law, Environment and Consumer Protection topic(s)
You sell products online. Maybe through your own website, maybe through a marketplace, maybe both. Either way, the European Commission’s decision last month to fine Temu €200 million should be on your radar, not because your business is Temu, but because the rules behind that fine apply to a wider universe of online businesses. In this article, we explain what happened, what the Digital Services Act actually requires of platforms operating in the EU, and what your business should be doing to stay on the right side of regulators.
What happened
On 28 May 2026, the European Commission issued a €200 million fine against Temu, the Chinese-owned e-commerce giant, for breaching the Digital Services Act (DSA), one of the largest enforcement actions under the regulation to date. EU regulators investigated Temu following complaints by pan-European consumers’ organisation BEUC and 17 of its national members.
The DSA came into force in 2023 and imposes obligations on online platforms operating in the EU, including marketplaces. Among other things, platforms must actively assess and manage the systemic risks their services create, from illegal content and harmful products to manipulative design practices.
The Commission found that Temu fell well short of this standard. Rather than basing its 2024 risk assessment on evidence specific to its own platform, Temu relied on generic information about the e-commerce sector more broadly. A mystery shopping exercise run by investigators also showed that a high proportion of chargers sold on the platform failed basic safety tests, and a significant share of baby toys either contained chemicals above legal limits or posed suffocation risks. On top of that, Temu had not considered how its own recommender algorithms and influencer promotion programmes were actively driving the spread of those illegal and unsafe goods.
Why this matters beyond Temu
The DSA creates a tiered system for online service providers. Very Large Online Platforms, i.e., those with more than 45 million monthly active users in the EU, face the heaviest obligations. But smaller marketplaces and platforms are not off the hook: baseline obligations around transparency, consumer protection, and seller verification apply regardless of size. If you operate an online intermediary service for EU users, the DSA likely applies to you.
Even if you are not a platform operator but simply sell through one, the DSA reaches you indirectly. Platforms are required to verify your identity and business details, and their compliance obligations will shape the rules you must follow as a condition of selling there, from product safety information to how quickly you respond to takedown requests. Non-compliance at your level can result in removal from the platform and, in some cases, individual liability depending on the severity of the violation.
What you should do now
Audit your risk assessment process. If you have not conducted a formal DSA risk assessment, or if yours relies on general industry information rather than evidence specific to your own platform, it needs revisiting.
Review your product monitoring practices. If you host third-party sellers, what systems do you have in place to identify illegal or unsafe products? Regular testing, automated screening, and clear takedown processes all matter, and you need to be able to demonstrate they are working.
Look at your algorithms. If you have recommender systems or promotional features, assess whether they have been evaluated for DSA risks. This is an area regulators flagged explicitly in the Temu investigation.
The bigger picture
The Temu fine reflects a deliberate and escalating shift in how EU regulators approach digital markets. Platforms are expected to take active responsibility for what happens on their services, and the Commission has shown it is willing to enforce that expectation at scale.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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