Temu Faces Rp4 Trillion EU Fine Over Illegal Product Sales

Jakarta, CNBC Indonesia - China’s Temu, dubbed the ‘e-commerce king’, has faced controversy due to its business model deemed ‘destructive to the market’. The platform sells goods directly from factories to end consumers without intermediaries. This has led to very low prices, raising concerns it could ‘kill’ the competitive environment for small and medium enterprises (SMEs). This also prompted the Indonesian government to block Temu and Shein, both Chinese firms with similar business models. Temu has also faced restrictions in other countries due to its controversial business practices. Most recently, European technology regulators fined Temu €200 million (Rp4.1 trillion). The issue stems from the retailer’s failure to take sufficient action to stop the sale of illegal products. Temu has been found to have failed in identifying, analysing, and assessing systemic risks from products sold on its platform, including harm experienced by EU consumers. The European Commission stated that Temu failed to properly assess how its recommendation systems and influencer-led promotions could risk the sale of illegal products. For this case, the European Commission has given Temu until 28 August 2026 to submit its future plans. Regulators will assess whether these plans adequately comply with existing rules. “This is about risk management, the cornerstone of our Digital Services Act (DSA),” said European Commission’s tech chief Henna Virkkunen, cited from Reuters on Tuesday, 30 May 2026. “This decision sends a strong message to Temu,” she stressed. Furthermore, the Commission will continue investigating whether Temu’s service design is addictive and whether the company sells illegal products and provides data access to recommenders and researchers. Temu has also responded, stating it disagrees with the European Commission’s decision and considers the fine disproportionate. Temu said the decision does not reflect current realities, adding the company has taken further steps to strengthen risk assessments. “The decision relates to our first DSA assessment in 2024 and does not reflect our current system. Temu has engaged constructively with the Commission during the process and taken further steps to strengthen risk assessments, platform governance, and user protection,” Temu said.