Because the European Union Fee continues to collect proof for its formal proceedings to find out whether or not Temu might have breached the Digital Providers Act, the fast-fashion big has stated it’s in talks to hitch the EU’s “Memorandum of Understanding on the sale of counterfeit items on the web.”
Owned by the Chinese language e-commerce big Pinduoduo, the procuring platform Temu debuted within the U.S. in 2022 and solid into choose European international locations final yr. The app was downloaded greater than 47 million occasions globally final month. Temu is alleged to generate practically 500 million month-to-month visits to its web site.
The investigation is trying into “areas linked to the sale of unlawful merchandise, the doubtless addictive design of the service, the programs used to suggest purchases to customers, in addition to information entry for researchers,” in line with the EU. Among the many features which might be being put below the microscope, so to talk, are the programs that Temu has in place to restrict the sale of non-compliant merchandise within the EU, the dangers tied to Temu’s addictive design of the service, and the corporate’s compliance with the DSA obligations when it comes to the way it recommends content material and merchandise. With greater than 45 million month-to-month energetic customers within the EU, Temu was designated a VLOP (very massive on-line platform) on the finish of Could.
Earlier this week Temu addressed the probe, saying that Temu “will cooperate totally with regulators to assist our shared objective of a protected, trusted market for shoppers.” In an announcement, the corporate stated it takes its “obligations below the DSA severely, repeatedly investing to strengthen our compliance system and safeguard client pursuits on our platform.”
A Temu spokesperson stated Tuesday, “Counterfeiting is an industrywide problem, and we imagine that collaborative efforts are important to advancing our shared targets of defending shoppers and rights holders.”
Counterfeit merchandise price the worldwide financial system greater than $500 billion yearly, in line with the U.S. Chamber of Commerce.
As much as 6 p.c of EU imports have been counterfeit merchandise in 2019, representing practically 119 billion euros in worth, in line with a report launched earlier this yr by the European Fee. When it comes to clothes, the sector misplaced roughly 12 billion euros in gross sales accounting for five.2 p.c of the whole EU gross sales. That determine additionally resulted in 160,000 fewer individuals being employed within the attire business.
To attempt to offset that, there are suggestions for EU stakeholders and member states to expedite collaboration and transparency, as a approach to take care of the age-old drawback of knockoffs. Within the EU, counterfeiting is thought to take its toll on small and medium enterprises, inflicting 34 p.c of these affected to be extra more likely to fail than bigger firms.
Ought to Temu be a part of firms just like the Vestiaire Collective by signing the MOU on the web gross sales of counterfeits, the rock-bottom-price style platform can be inspired to use for the EU’s Digital Providers Act’s “trusted flagger standing” and take part in “the modernization of the MOU.” The EU is looking for extra market surveillance to detect and combat counterfeiting and elevated use of AI programs together with blockchain and content material recognition expertise to boost traceability and detection of counterfeit and pirated merchandise.
