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EU Cracks Down on Temu 🛍

Hey there! 👋

The European Commission recently launched a crackdown on Temu, one of the fastest-growing online marketplaces, over some seriously questionable business practices! They're allegedly breaking multiple EU consumer protection laws.

Let’s dive into what happened, how this affects businesses, and how law firms could be involved.

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What's Happening? 🤨

The Consumer Protection Cooperation (CPC) Network identified several practices by Temu that may breach EU regulations:

• Fake Discounts: Offering misleading discounts where none exist.

• Pressure Selling: Using tactics like false claims about limited stock or purchase deadlines to rush consumers into buying.

• Forced Gamification: Requiring users to play games like "spin the fortune wheel" to access the marketplace, without clear information about the terms.

• Misleading Information: Providing incomplete details about return policies and minimum order values.

• Fake Reviews: Displaying reviews suspected to be inauthentic without explaining their verification process.

• Hidden Contact Details: Making it difficult for consumers to contact Temu for support or complaints.

These findings are part of a coordinated effort by the CPC Network, involving authorities from Belgium, Germany, and Ireland, under the European Commission's coordination.

What Does This Mean for Consumers and Businesses? 🛒

For consumers, this action aims to ensure a safer and more transparent online shopping experience. As Temu has been given one month to respond to the commission, it could face enforcement measures if Temu fails to address these concerns within a month. This includes fines based on its annual turnover in the affected EU Member States.

This action sends a strong signal to businesses operating in the EU who should take note of this development as a reminder to comply with consumer protection laws. The European Commission emphasises that online marketplaces must adhere to EU standards to maintain a fair digital marketplace.

How could law firms be involved? ⚖️

There are several ways in which a law firm could be involved in the Temu situation.

• Law firms could advise Temu on its alleged breach of EU protection law. This includes assisting in helping Temu align its practices with EU regulations while also maintaining business efficiency. For example, completely restructuring Temu’s marketing and promotional strategies to ensure compliance with EU regulations.

• Most importantly, Temu’s legal team would be trying to convince the European Commission to show that Temu is fixing its problems to address the concerns made.

This case also relates to Temu's obligations under the Digital Services Act (DSA), which highlights the importance of compliance for large online platforms operating in Europe.

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I hope you enjoyed this article. See you next week! 👋

Written by Santhosini S