European Union: Adopted European Commission decision designating Temu as a Very Large Online Platform under Digital Services Act

On 31 May 2024, the European Commission adopted a decision designating Whaleco Technology Limited for its service Temu as a Very Large Online Platform (VLOP) under the Digital Services Act (DSA), following its report of having more than 45 million monthly users in the European Union. Within four months of the designation, Temu is required to comply with the additional obligations under DSA. In particular, Temu is required to implement several measures to enhance its surveillance of illegal products and analyse and report systemic risks related to the dissemination of illegal content and products from its service design and operation. Initial risk assessment reports are due to the Commission four months after formal designation, with annual updates thereafter. To mitigate these risks, Temu is mandated to adapt its terms of service, improve user interfaces for better detection and reporting of suspicious listings, enhance moderation processes for removal of illegal items, and refine algorithms to prevent the sale and promotion of prohibited goods. Additionally, the company must strengthen its internal processes and resources related to detecting systemic risks. Consumer protection measures require Temu to annually assess potential adverse effects on consumer health and safety, focusing particularly on underage users. The platform must incorporate age verification systems to restrict the purchase of age-restricted items and must structure its operations to prevent the sale of unsafe or illegal products. Furthermore, Temu is expected to maintain transparency and accountability through external, independent audits, biannual transparency reports on content moderation, and annual reports on systemic risks and audit results. The company must also provide access to ad repositories and publicly available data to vetted researchers, ensuring ongoing compliance and oversight.