The European Commission has applied the Digital Services Act against a Chinese marketplace for the first time, citing an inadequate risk assessment. Temu says the fine is disproportionate and is reviewing all available options.
What Happened
On May 28, 2026, the European Commission imposed a €200 million (~$232 million) fine on Chinese online marketplace Temu. The grounds: a breach of the Digital Services Act (DSA) — the company failed to conduct an adequate assessment of the systemic risks posed by illegal and unsafe products sold on its platform.
It is the largest penalty in the history of the DSA, surpassing the €120 million levied against Elon Musk's X in December 2025. The investigation ran for nearly two years, from the moment Temu was designated a Very Large Online Platform (VLOP) in May 2024.
«Risk assessments are not box-ticking exercises — they are the backbone of the DSA. Temu's risk assessment underestimates concrete risks, lacks specificity, is not grounded in solid evidence, and is not comprehensive.»
Henna Virkkunen, Executive Vice-President of the European Commission for Tech Sovereignty, Security and DemocracyWhat Regulators Found
The investigation, launched in October 2024 following complaints by pan-European consumer organisation BEUC and 17 of its national members, included an undercover mystery shopping exercise carried out by an independent testing organisation. The findings were alarming.
A significant share of the chargers purchased failed basic electrical safety checks. A notable proportion of children's toys posed medium-to-high severity risks: products contained chemicals above legal limits or featured small detachable parts that create a choking hazard.
Independent testing by BEUC in February 2025 found phthalates — chemicals linked to reproductive harm — at concentrations reaching up to 240 times the legal limit. Unsafe products were also identified in jewellery, footwear, clothing, cosmetics, and food contact materials.
Regulators were particularly critical of the fact that Temu's risk assessment failed to account for the role of its own recommendation algorithms and influencer affiliate programmes — mechanisms that were actively amplifying the spread of non-compliant listings.
Temu's Position
«Temu respects the objectives of the Digital Services Act and the need for clear, consistent rules across the digital economy. However, we disagree with the European Commission's decision and consider the fine to be disproportionate. The decision relates to our first DSA assessment in 2024 and does not reflect the current state of our systems. Temu engaged constructively with the Commission throughout the process and has since taken further steps to strengthen risk assessment, platform governance, and user protection. We are reviewing the decision carefully and considering all available options.»
The Fine in Context
DSA Penalty Scale
The €200 million figure sits at the lower end of what the DSA permits. Regulators have made clear this is not a final verdict, but a signal of readiness to escalate.
What Happens Next
Temu must submit an action plan to the Commission by August 28, 2026, setting out concrete measures to remedy its breach of risk-assessment obligations. The European Board for Digital Services will have one month to review the plan. If it is found inadequate — or if Temu fails to implement the required changes on time — periodic financial penalties may be added on top of the €200 million fine.
In parallel, a new EU customs duty of €3 per parcel valued at up to €150 comes into force on July 1, 2026 — a direct blow to Temu's business model, which is built on low-cost direct shipments from China to European consumers.
The investigation is not closed: regulators intend to examine whether the platform's design features are addictive, and to scrutinise its recommendation systems and access for researchers to platform data.
Timeline of the Case
The Temu fine is part of a wider squeeze on Chinese e-commerce in Europe. The platform is simultaneously under scrutiny from national consumer protection authorities over suspected use of fake discounts and misleading reviews. BEUC has called for the cumulative pressure to drive genuine behavioural change from the marketplace.
The DSA is setting a precedent: platforms with tens of millions of users in the EU bear systemic responsibility not only for individual violations, but for the overall architecture of their risk management. Shein — another major Chinese marketplace operating in the EU — may be next in line for similar scrutiny.