The European Commission has formally designated Temu as a Very Large Online Platform (VLOP) under the Digital Services Act (DSA). Temu is an online marketplace with an average of more than 45 million monthly users in the European Union. This user number, which Temu has communicated to the Commission, is above the DSA threshold for designation as a VLOP. Following the designation as a VLOP, Temu will have to comply with the most stringent rules under the DSA within four months of its notification (i.e. by the end of September 2024), such as the obligation to duly assess and mitigate any systemic risks stemming from their services, including the listing and sale of counterfeit goods, unsafe or illegal products, and items that infringe intellectual property rights.
More specifically, these additional obligations include:
More diligent surveillance of illegal products
Temu needs to diligently analyse the specific systemic risks with regard to the dissemination of illegal content and products and from the design or functioning of its service and its related systems. Risk assessment reports will have to be provided to the Commission 4 months after the notification of the formal designation and thereafter one a year.
Temu must put in place mitigation measures to address risks, such as the listing and sale of counterfeit goods, unsafe products, and items that infringe on intellectual property rights. These measures can include adapting the terms of service, enhancing user interface design for better reporting and detection of suspicious listings, improving moderation processes to swiftly remove illegal items, and refining its algorithms to prevent the promotion and sale of prohibited goods.
Temu must reinforce its internal processes, resources, testing, documentation, and supervision of any of the activities linked to the detection of systemic risks.
Enhanced Consumer Protection Measures
The yearly risk assessment reports by Temu must specifically evaluate any potential adverse effects on consumer health and safety, with an emphasis on the physical and mental well-being of underage users.
Temu is required to structure its platform, including user interfaces, recommendation algorithms, and terms of service, to mitigate and prevent risks to consumer safety and well-being. Measures must be implemented to protect consumers from purchasing unsafe or illegal goods, with particular focus on preventing the sale and distribution of products that could be harmful to minors. This includes incorporating robust age assurance systems to restrict the purchase of age-restricted items.
More transparency and accountability
Temu needs to ensure that its risk assessments and compliance with all the DSA obligations are externally and independently audited every year.
Temu needs to publish repositories of all the ads served on its interface.
Temu will have to give access to publicly available data to researchers, including to vetted researchers designated by Digital Services Coordinators.
Temu needs to comply with transparency requirements, including the publication of transparency reports on content moderation decisions and risk management every six months, in addition to reports on the systemic risks and audit results once a year.
Temu has to appoint a compliance function and be subject to an external independent audit every year.
