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Temu accused of ‘manipulative’ sales techniques and lack of transparency

Consumer groups across Europe concerned at business practices at rapidly growing Chinese-based online retailing platform

Temu is a rapidly growing online platform with more than 75 million monthly users across Europe. Photograph: iStock

Conor Pope
Thu May 16 2024 - 05:30

One of the fastest growing online shopping portals in internet history has been accused of using manipulative sales techniques illegal under EU law and failing to protect European consumers.

Consumer groups across Europe said Temu, the booming Chinese online marketplace that has more than 75 million monthly users across Europe, frequently fails to provide information about the sellers on its platform and offers inadequate information about its system of recommendations and the criteria used to lead shoppers to certain products.

The online marketplace is “rife with manipulative techniques – dark patterns – to get consumers to spend more than they might originally want to, or to complicate the process of closing down their account”, the Bureau Européen des Unions de Consommateurs (BEUC) said. BEUC is a network of consumer protection agencies between member states of the EU and the European Economic Area as well as states applying for EU membership.

It accused Temu of breaching the EU’s new online content law, the Digital Services Act, on all of the above points and called for it to be investigated by the authorities.

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“Temu may be taking Europe by storm but today we want to shine a light on its many illegal practices, which are disregarding consumers’ interests and which authorities must rein in,” said Monique Goyens, the BEUC director general.

Products sold on marketplaces, whether online or offline, whether they are European, American or Chinese, must be safe and comply with European law if they sell to European consumers

—  Monique Goyens

“The online marketplace is rife with manipulative techniques that are designed to push consumers to spend more on the platform,” she continued.

She highlighted how consumers can be presented with “various, more expensive versions once they have clicked on a particular product, or they have to go through an obstacle course to close down their account”.

She stressed that “products sold on marketplaces, whether online or offline, whether they are European, American or Chinese, must be safe and comply with European law if they sell to European consumers”.

In response to queries from The Irish Times, a spokeswoman from the online platform said Temu was “a newcomer to Europe” and had been “actively adjusting our service to align with local practices and preferences, and we are committed to full compliance with the laws and regulations of the markets where we operate”.

She said the company aims “not just to meet the minimum legal requirements but to exceed them by adhering to the highest standards of best practices”.

She suggested that the company’s “commitment to compliance and our willingness to engage stakeholders globally can be seen in our proactive actions” and noted that it had made a commitment with a leading German consumer group earlier this week and would be “addressing concerns raised about our practices, many of which are covered by the BEUC’s complaint”.

Regarding the specifics of the BEUC complaint, she said Temu “take it very seriously and will study it thoroughly. We hope to continue our dialogue with the relevant stakeholders to improve Temu’s service for consumers ... We are committed to transparency and full compliance with all applicable laws and regulations.”

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Digital marketing agency Wolfgang Digital has conducted research across its retailer customer base that shows Temu was in direct competition with all Irish online retailers during the last quarter of 2023.

The data collected “confirms what many in the industry had suspected [that] Temu is aggressively targeting the Irish and all geographic markets by purchasing ads targeted at customers across a wide range of product categories from fashion to DIY, from electrical to furniture and everything in between”, the agency said.

Commenting on the results, Brendan Almack managing director of Wolfgang Digital, noted that the online platform “is now every online retailer’s competitor. The scale of the budgets available to Temu is immense. It is reported that they spent €1.5 billion on Google Ads alone last year. For context, the entire Irish advertising industry is estimated to be worth about that.”

Conor Pope

Conor Pope

Conor Pope is Consumer Affairs Correspondent, Pricewatch Editor and cohost of the In the News podcast

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