Daily Reports
The European Commission has turned its attention to Chinese e-commerce giants Shein and Temu to verify their compliance with the Digital Services Act (DSA). The DSA, which came into full force on February 17, mandates large tech companies to combat the spread of illegal and harmful goods and content. The Commission is particularly interested in the measures these platforms have implemented to allow users to report illegal products, avoid deceptive interfaces known as 'dark patterns,' protect minors, ensure the transparency of product recommendation systems, and trace the sellers on these platforms.
Brussels' request for information is based on reports from various European consumer protection organizations. In May, the European Consumer Organization (Beuc) filed a complaint against Temu, accusing the app of using 'manipulative techniques' to influence consumer behavior. Both Shein and Temu have until July 12 to provide the requested information. Depending on their responses, the European Commission may open a formal proceeding and impose periodic sanctions.
Shein and Temu were added to the list of digital giants directly supervised by the European Commission at the end of April and May, respectively. This list includes 24 major platforms such as Amazon, AliExpress, Google Shopping, Facebook, X, and Instagram. The inclusion of Shein and Temu underlines the Commission's commitment to enforcing the DSA's stringent requirements.
Shein, founded in China in 2012, has often been criticized for its social and environmental excesses associated with low-cost fashion. Temu, the international version of the Chinese e-commerce giant Pinduoduo founded in 2015, has seen rapid growth in Europe due to its low-price strategy. Temu offers a wide range of products, including clothing, toys, decoration, tools, and high-tech items. European consumer associations have raised concerns about Temu's use of misleading interfaces to manipulate consumers and encourage increased spending on the platform.
- The Digital Services Act (DSA) represents a significant step forward in regulating the digital marketplace within the European Union. By targeting large tech companies, the DSA aims to create a safer online environment for consumers by ensuring transparency and accountability.
- The European Commission's scrutiny of Shein and Temu highlights the broader effort to hold e-commerce platforms accountable for their business practices. This move is part of a larger strategy to protect consumers from deceptive practices and ensure fair competition within the digital marketplace.
- The outcome of this investigation could set a precedent for how other e-commerce platforms operate within the EU. If Shein and Temu are found to be in violation of the DSA, they could face significant financial penalties, which would serve as a deterrent to other companies engaging in similar practices.
