The European Commission has fined Chinese-owned e-commerce platform Temu €200 million ($232 million) for violating European Union rules designed to prevent the sale of illegal products online.

The fine was imposed after the Commission found that Temu breached Digital Services Act (DSA) regulations by failing to properly identify and assess systemic risks associated with illegal products being sold on its platform. According to the Commission's findings, consumers are "very likely to encounter illegal items" when using the popular online marketplace.

The regulatory action specifically cited Temu's inadequate measures regarding risky products including baby toys and faulty chargers. The Commission determined that the platform failed to take sufficient account of the risks posed by such products to consumer safety.

Temu, which has gained significant market share in Europe as a low-cost alternative to other e-commerce platforms, operates under parent company PDD Holdings. The platform offers a wide range of consumer goods, often at significantly discounted prices compared to traditional retailers.

The Digital Services Act, which came into full effect in 2024, requires large online platforms to implement robust systems for identifying and removing illegal content and products. The legislation aims to create a safer digital environment for European consumers while holding tech companies accountable for content moderation failures.

This enforcement action represents one of the most significant penalties imposed under the DSA since its implementation, signaling the European Union's commitment to strict oversight of major digital platforms operating within its jurisdiction.