Investigation on consumer law infringements could lead to heavy fines
The EU has stepped in to tackle Temu as the Chinese-owned online marketplace is under fire across the world for consumer law and copyright infringements.
With a strong roster of UK-based publishers among the companies leading the charge against the hundreds of thousands of copycat products on the platform – with more popping up as fast as complaints and solicitors’ letters get them taken down – the European Union has notified Temu of a number of practices it believes infringe EU consumer law.
While none relate to intellectual property infringements, the issues include fake discounts, pressure selling, forced gamification where consumers have to play a spin-the-wheel game to access the marketplace, missing and misleading information, fake reviews, and hidden contact details.
The notification came on Friday, 8 November, and the company now has one month to reply to the Consumer Protection Cooperation Network’s findings and propose commitments on how it will address the identified consumer law issues, as well as provide information so its compliance on further obligations can be assessed, including clear info on whether a seller is a trader or not, ensuring product rankings and reviews are not presented misleadingly, price reductions are announced and calculated correctly, and any environmental claims are accurate and substantiated.
If Temu fails to address the concerns raised by the CPC Network, national authorities can take enforcement measures to ensure compliance, including imposing fines based on the annual turnover in the EU member states concerned.
As the UK is no longer a member of the European Union, the action isn’t relevant here but it shows the high levels of concern across the world over the way the online marketplace is operated by the Chinese e-commerce company PDD Holdings, which is registered in the Cayman Islands with Dublin listed as its principal office address.
Publishers including Bewilderbeest, Bexy Boo, Bold & Bright, Brainbox Candy, Dandelion Stationery, Dean Morris Cards, Draenog, Emily Nash Illustration, Emma Ball, Holy Mackerel, Klara Hawkins, Modern Toss, Mungo And Shoddy, Off The Leash, Paper Plane, Paper Shed, Redback Cards, Rosie Made A Thing, Sarah Ray, and Studio Boketto, are among who have had their designs stolen by Temu sellers.
PG Buzz has already produced a number of stories revealing how publishers have banded together to beat the copycats, GCA member and IP specialist McDaniels Law has taken on the matter as a case study – already succeeding in getting Dandelion Stationery’s copies removed – online greeting card marketplace Thortful is supporting creatives in the fight, the battle hit the BBC news on Thursday last week, and there’s a seven-page Temu takedown guide available.
The guide by McDaniels Law, which is available here, gives all the information in a step-by-step format for publishers and creatives to report infringements to the Chinese-owned online marketplace, and insist their plagiarised works are taken down.
The EU move follows a coordinated and continuing investigation at European level with the CPC Network directing the company to bring those practices with which potential customers are confronted while shopping on Temu, including such that may mislead consumers or unduly influence purchasing decisions, in line with the laws.
The enforcement action comes a week after formal proceedings were opened against the online marketplace under the EU’s Digital Service Act, and the CPC Network is also investigating whether Temu complies with specific information obligations for online marketplaces under its consumer law, and national proceedings have already been announced in EU member countries Hungary, Poland and France.
