Chinese marketplace Temu may join European anti-counterfeit group

Chinese online retailer Temu is reportedly considering joining a group of ecommerce platforms and brands that collaborate to prevent the sale of fake products online in Europe.

According to a meeting agenda seen by news agency Reuters, Temu is set to make a presentation at a November 11 meeting of Memorandum of Understanding (MoU) members as a "potential new signatory".

The 'MoU on the sale of counterfeit goods on the internet' is a voluntary agreement facilitated by the European Commission. Signatories include online retailers Amazon, Alibaba, and eBay, and brands like Adidas, Nike, Hermes and Moncler.

A Temu spokesperson told Reuters the firm is in discussions to join the initiative, adding that "collaborative efforts are essential" to address counterfeiting.

Temu's engagement with the anti-counterfeits network comes as EU authorities ramp up pressure on Temu to improve its controls on products sold to European shoppers through its marketplace.

The European Commission on Thursday launched an investigation into Temu over potential breaches of EU rules against the sale of illegal products, having earlier this month requested information from Temu under the Digital Services Act (DSA), an EU law.

Temu, a subsidiary of Chinese e-commerce giant PDD Holdings, has grown rapidly in Europe and the United States, drawing millions of users to its website and app with the slogan 'shop like a billionaire', offering highly competitive prices on everything from kitchen appliances and electronics to clothing and accessories.

The European Commission designated Temu a "very large online platform" in May meaning it must do more to fight illegal and harmful content as well as counterfeit products on its platform under the DSA.

Temu had 92 million monthly active users in the EU in September, the Commission said on Thursday.

The EU probe could lead to hefty fines for the company. It will partly focus on what it believes could be a potentially addictive design of Temu's service, including its game-like reward programmes, and its systems to recommend purchases to users.

Temu said it will cooperate with regulators. "Temu takes its obligations under the DSA seriously, continuously investing to strengthen our compliance system and safeguard consumer interests on our platform," the company said in a statement.

The EU tech enforcer will also investigate whether Temu is complying with the DSA obligation to provide researchers access to its publicly accessible data.

"We want to ensure that Temu is complying with the Digital Services Act. Particularly in ensuring that products sold on their platform meet EU standards and do not harm consumers," EU antitrust and tech chief Margrethe Vestager said in a statement.

Temu could face a fine of as much as 6 percent of its global turnover if found guilty of breaching the DSA.