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Temu accused of breaching EU's DSA in bundle of consumer complaints | TechCrunch

Temu accused of breaching EU's DSA in bundle of consumer complaints | TechCrunch

Consumer protection groups around the EU have filed coordinated complaints against Timo, accusing the Chinese-owned ultra-low-cost e-commerce platform of violations related to the bloc's Digital Services Act (DSA). Is. Temu only started in the region a year ago Recently reported Destroying 75 million monthly users.

Fines for confirmed breaches of the EU's online governance and marketplace safety regime can reach up to 6% of the platform parent's global annual turnover. For some reference, Timo's parents Pindodo Reported revenues of about $35 billion for 2023, nearly double the previous year; There was Timo. Estimated Last year it accounted for around 23% of this amount.

BEUC, the European consumer organization that represents 45 regional consumer protection groups in 31 EU countries, said on Thursday it had lodged a complaint with the European Commission against Timo – calling on the EU to Immediately designate it as a “Very Large Online Platform” (VLOP). Under DSA (VLOP-status will mean that Timo will have to comply with additional algorithmic transparency and accountability rules, including mitigating systemic risk. Other e-commerce VLOPs involved in (Alibaba, Amazon, Booking.com, Google Shopping and Zelando.)

At the same time, 17 BEUC member organizations around the block have lodged DSA complaints with their national consumer protection authorities – accusing Timo of breaching it. General rules of regulation applicable to Timo from mid-February..

The consolidated complaints allege that the e-commerce company is failing to meet many of the DSA's requirements, including merchant traceability requirements; rules against manipulative designs; and transparency around product recommender algorithms.

Commenting in a statement, BEUC Director General Monique Goyens alleged that the marketplace is “full of manipulative techniques” designed to force consumers to spend more, and claimed that merchants Inadequate information about “often leaves consumers in the dark about who they are buying products from.”

“This lack of traceability prevents consumers from making an informed decision or knowing whether a product complies with EU safety rules,” he added.

Consumer protection groups are also raising concerns about modest safety, pointing to steep price discounts and gamification features built into Timo's platform that could be attractive to children.

“Temu does not guarantee its users a secure, predictable, and reliable online environment as required by law,” they argue in the complaint. “Among other things, we have serious concerns that users are falling victim to manipulative techniques, that Timo is failing to ensure the traceability of merchants operating on its platform, or that its overall operations are opaque. Yes, this is a violation of the Digital Services Act.”

“Ultimately, the large number of dangerous products sold on Timo by unrecognizable merchants, through manipulative methods and opaque referral systems, are ingredients in a toxic cocktail that undermines the privacy, safety and security of minors.” can deliver,” groups have also warned.

The consolidated complaints follow some individual actions by consumer groups regarding the safety and legality of products for sale on Timo's marketplace.

For example, last fall, Italian consumer group Altroconsumo tested cosmetics bought on the platform and found that the majority failed to list ingredients (or the full list). Earlier this year, German consumer organization vzbv raised concerns about misleading product reviews and price discounts being displayed on the platform.

As Timo is not currently a designated VLOP, its supervision with the general DSA rules falls to the authorized Digital Services Coordinators in the EU Member States where its service operates. Ireland's media watchdog, Coimisiún na Meán, is in the frame as Timo Opened an office in Dublin a year ago..

However, the complaint is likely to increase pressure on the EU to designate Timo as a VLOP. A spokesperson for the commission told us he is familiar with Timo. Recently reporting More than 45 million monthly active users in the EU – the threshold for triggering VLOP status – added: “We are in contact with the platform in view of a possible future designation.”

Timo has been contacted for comment. update: The company sent a statement, describing itself as a “newcomer” in the region and saying it was taking feedback from consumers, regulators and consumer groups. And it also claims that it is adjusting the way it works to suit local expectations. Last week, Timo “announced a cease-fire” with Germany's VZBV, the statement said. It suggests that many of the authority's concerns relate to BEUC's complaint about its practices, adding that it is committed to addressing the issues raised.

“Regarding BEUC's complaint, we take it very seriously and will thoroughly study it,” Timo also wrote. “We look forward to continuing our discussions with relevant stakeholders to improve Timo's services to customers. Where we identify areas for improvement, we will continue to enhance our service and address any shortcomings.” Eager to work together to remove. We are committed to transparency and full compliance with all applicable laws and regulations.

last month Shen, another Chinese e-commerce giant is saying. Bound in fierce rivalry with Timo — including in relation to international market expansion — was designated as a DSA VLOP by the EU after it reported exceeding the 45M MAUs threshold.

While, Back in Marchthe EU opened its first DSA investigation into a marketplace, targeting another Chinese-owned e-commerce platform — Alibaba's AliExpress — which was named VLOP in the first wave of designations. April last year.

The commission then said it suspected AliExpress of violating DSA rules in areas related to risk management and mitigation. Content moderation and its internal complaint handling procedures; transparency of advertising and recommendation systems; tracking traders; and data access for researchers. The investigation – one of several EU VLOPs opened since. Last year's compliance deadline Launched for these major platforms — ongoing.

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