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The Chinese online retailer Temu is under investigation by the EU for potentially violating tech rules by selling illegal products, as reported by EU technology regulators. This investigation could result in significant fines for the company. Additionally, regulators are looking into the design of Temu’s service, which they believe may be addictive due to game-like reward programs and purchase recommendation systems.

The European Commission initiated this investigation under the Digital Services Act (DSA), which imposes stricter guidelines on large online platforms like Temu to address illegal and harmful content on their sites. The inquiry was prompted by complaints from a pan-European consumers organization and 17 of its national members.

With 92 million users across the EU, Temu is a subsidiary of the Chinese ecommerce giant PDD Holdings. The EU’s tech enforcement agency will also examine whether Temu is adhering to the DSA mandate to grant researchers access to its public data.

EU antitrust and tech chief Margrethe Vestager emphasized the importance of ensuring Temu’s compliance with the Digital Services Act. The main goal is to verify that the products sold on the platform meet EU standards and do not pose risks to consumers.

In the event that Temu is found guilty of violating the DSA, the company could face fines of up to 6% of its global revenue. This indicates the seriousness with which EU regulators are approaching the investigation into Temu’s practices.