The Irish competition regulator is “scrutinising” Temu for potential breaches of consumer law.
The Competition and Consumer Protection Commission (CCPC) has informed the Chinese shopping site its investigation has “identified practices which may mislead consumers or unduly influence their purchasing decisions,” it said in a statement.
The investigation is a joint one with Belgian and German consumer authorities.
Temu which acts as an online marketplace, has grown rapidly in recent years. It claims more than 75 million users in Europe, and reportedly overtook Ebay in terms of user numbers in the EU last year. Globally, it is now the second biggest ecommerce site behind Ebay according to data from SimilarWeb, an analytics firm.
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The investigation has already identified a number of potential issues including fake discounts, fake pressure to complete purchases as well as “missing and misleading information.” The investigation has also highlighted suspected fake reviews as well as “hiding essential information” tied to a game consumers are forced to play to access the online market place.
“All of these could interfere with the consumer’s right to make an informed decision about how and where they spend their money,” Kevin O’Brien, member of the CCPC, said. “Large online marketplaces have obligations under consumer law; we look forward to engaging constructively with Temu during this investigation.”
In response, “Temu acknowledges the concerns raised by the European Commission and national consumer authorities and reiterates our commitment to working closely with the relevant regulators to address any issues and ensure compliance with EU laws,” the company said in a statement.
“Although we have gained popularity with many consumers in a relatively short time, we are still a very young platform — less than two years in the EU — and are actively learning and adapting to local requirements. We will fully cooperate with this investigation, as we believe that such scrutiny benefits consumers, merchants, and the platform in the long term,” it added.
The CCPC is also seeking information from Temu to “assess if it is following EU consumer laws on discount calculation, product ranking, review and rating authenticity, trader identification, and environmental claims,” the regulator said.
Temu, which has its European base in Dublin, has one month to respond with proposals to combat the issues.
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