Background: Temu is a Chinese-owned e-commerce marketplace with hundreds of millions of users globally. It launched in Australia in 2023 and has quickly grown into one of the country's most downloaded shopping apps, now serving nearly 5 million customers. It's had its fair share of scrutiny over product safety compliance and allegations of worker exploitation in its supply chain.

What happened: Now, the European Union has just fined Temu €200 million for breaching the Digital Services Act. Regulators found the platform failed to properly assess or identify risks linked to illegal products being sold on its marketplace. They also raised concerns that Temu's recommendation algorithm was actively promoting these products to more users.

What else: Temu pushed back, calling the fine "disproportionate" and arguing that improvements have been made since the 2024 assessment. And here in Australia, the ACCC watching closely as Australia works toward platform accountability regulations targeting large digital marketplaces on our own turf.

What's the key learning?

💡 For a long time, tech platforms gained all the upside of hosting a marketplace, with none of the responsibility for what got sold there. They were treated as neutral intermediaries instead of accountable operators...even when harmful or illegal activity happened on their platforms.  

💡 That model is now shifting globally, with regulators arguing that if platforms make money from the platform, they also carry responsibility for what is sold on there. And for Temu, that means being held responsible for actively promoting and hosting illegal items.  

💡 It's not just Temu, Meta has been accused of profiting from these ads at scale and is now facing lawsuits from individuals like Twiggy Forrest and governments. So, for any platform whether it's Temu, Meta, the cost of turning a blind eye is now very real.