We all like a
good deal! However, those of us who know (a bit more) about consumer rights and
consumer law are aware that cheap goods and services often come at a high
price, by infringing our consumer rights.
TEMU, the
online marketplace that has gained popularity in the EU, has recently came under
the spotlight. This month, BEUC, The European Consumer Organisation, has taken
a significant step by initiating an enforcement campaign against TEMU, named 'Taming Temu'. The
campaign is a response to TEMU's violation of its consumer protection
obligations under the Digital Services Act. The identified
breaches include:
- failing to provide sufficient traceability of the traders that sell on its platform and thereby to ensure that the products sold to EU consumers conform to EU law.
- using manipulative practices such as dark patterns to get consumers, for example, to spend more than they might originally want to, or to complicate the process of closing down their account.
- failing to provide transparency about how it recommends products to consumers.
BEUC filed a complaint with the European Commission,
while 17 of BEUC’s members filed the same complaint with their competent
national authorities. For a more efficient and effective enforcement
action, BEUC asks the Digital
Services Coordinators of each country (national authorities responsible for
enforcing the EU’s Digital Services Act) to transfer the complaints to the
Irish authority, TEMU’s country of registration. It would then be up to the
Irish authority to take swift action to prevent further consumer harm.
Given the fast
growth in the number of TEMU users, it is possible that the platform would pass
the threshold of 45 million users per month, which would then classify it as a
‘very large online platform’ and grant the Commission competence to enforce the
Digital Services Act.
Given that consumer law enforcement, especially against large platforms, was less effective in the past (see for instance our reports here and here), a concerted EU action is a welcome solution.