Ireland’s consumer watchdog, the Competition and Consumer Protection Commission (CCPC) is scrutinising retail giant Temu for potential breaches of consumer protection law.
Along with Belgian and German consumer authorities, the ongoing investigation, which is being carried out through the European Commission’s Consumer Protection Cooperation (CPC) Network, has identified practices which may mislead consumers or unduly influence their purchasing decisions.
Known for selling heavily discounted products manufactured in China, Temu has its European base in Dublin. Temu now has one month to propose commitments on how they will address the identified consumer law issues.
Several problematic practices have already been identified. These include:
- : Giving consumers the false impression that products are discounted when they are not.
- : Putting consumers under pressure to complete purchases using tactics like false claims about limited supplies of products or false purchase deadlines.
- : Displaying incomplete and incorrect information about consumers’ legal rights to return goods and receive refunds. Failing to inform consumers in advance that their order needs to reach a certain minimum value before they can complete their purchase.
- : Giving inadequate information about how Temu ensures that reviews published on its website are genuine. Authorities identified reviews that they suspect to be fake.
- n: Forcing consumers to play a ‘spin the fortune wheel’ game to access the online marketplace, while hiding essential information about the conditions of use that apply to the rewards of the game.
Information has been requested from Temu to assess if it is following EU consumer laws on discount calculation, product ranking, review and rating authenticity, trader identification, and environmental claims.
Temu said it will co-operate fully with regulators. “We will cooperate fully with regulators to support our shared goal of a safe, trusted marketplace for consumers,” the company said.
Kevin O’Brien, Member of the CCPC said the investigation has found potentially misleading practices including fake discounts, fake countdown timers, and missing or misleading information about products, sellers and consumer rights. “All of these could interfere with the consumer’s right to make an informed decision about how and where they spend their money,” he said.
“Large online marketplaces have obligations under consumer law; we look forward to engaging constructively with Temu during this investigation.”
The most recent accounts filed by Temu’s Irish subsidiary Whaleco Ltd show the company employs three administrative workers and recorded revenues of $758m (€693.2m) from July 2022 to the end of 2023 with a profit of $10.8m (€9.9m) paying corporation tax of just under €6m.