The Consumer Protection Cooperation Network (CPC), which brings together the European Union’s consumer protection authorities, including the Economic Competition Authority (GVH), and the European Commission have decided to take serious action against Temu. The online marketplace has been called upon to bring its abusive practices into line with the network’s assessment, which go against EU consumer protection rules.
Last week, the Commission launched formal proceedings under the Digital Services Act (DSA) against the Chinese online marketplace operator. The DSA procedure and the joint consumer protection enforcement procedure of the CPC network work in close cooperation and complement each other.
The CPC network identified several problematic practices on the Temu online platform. Temu falsely gives the impression that the products can be purchased with discounts, but in many cases the promised discount cannot be applied. The store pressures users to complete a purchase through tactics such as false claims of limited product inventory or false purchase deadlines.
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The marketplace forces consumers to play a “spin the wheel of fortune” game to access the online marketplace while hiding essential information about the terms of use associated with the game’s rewards. In addition, the information on returning and refunding goods is incomplete and incorrect. Consumers are not properly informed about how Temu ensures the authenticity of the reviews published on its website, so they may also come across fake reviews.
The CPC network requested information from Temu to assess whether the company complies with its additional obligations under EU consumer protection law. Consumers must be clearly informed whether the seller of the product is a trader or not, and it must be ensured that product rankings, ratings and ratings are not presented in a way that is misleading to consumers. Ensure that price reductions are calculated correctly and that environmental claims are accurate and substantiated.
Temu has one month to respond to the European Consumer Protection Network’s findings and propose commitments on how it will address the consumer protection legal issues identified. If it does not address the concerns raised by the Consumer Protection Cooperation Network, national authorities may take enforcement measures to ensure compliance.
The GVH was the first of the European competition authorities to initiate a competition supervision procedure against Whaleco Technology Limited, which operates the Temu online marketplace, in March this year, after suspicions arose that the company was engaging in possibly deceptive commercial practices through the website and the Temu mobile application in relation to the essential characteristics of the products, in particular regarding the environmental effects of the products. The investigation by the Hungarian national competition authority is currently ongoing.
Source: www.hwsw.hu
