What Are the Key Compliance and Regulatory Risks for Temu in 2025?

SEC's stance on Temu's regulatory compliance remains uncertain

While the Federal Trade Commission has taken decisive action against Temu, the Securities and Exchange Commission's position on the platform's regulatory compliance remains notably ambiguous. The FTC's September 2025 enforcement action resulted in a $2 million settlement, marking the first INFORM Consumers Act enforcement case. This penalty specifically addressed Temu's failure to implement required transparency mechanisms, including delayed implementation of telephonic reporting systems until January 2024 and inadequate suspicious activity reporting mechanisms.

However, the SEC has not issued comparable public statements or enforcement actions regarding Temu's compliance with securities-related regulations. This creates a regulatory vacuum where Temu's obligations under SEC jurisdiction remain unclear. The distinction between FTC and SEC oversight is critical: the FTC focuses on consumer protection and marketplace transparency, while the SEC addresses capital markets and investment-related compliance.

Industry observers note that Temu's rapid expansion and international operations present complex jurisdictional questions that the SEC has yet to clarify. Without explicit SEC guidance or enforcement precedent, digital marketplace facilitators operating in similar models face uncertainty regarding securities compliance expectations. This regulatory ambiguity could either indicate that SEC oversight is forthcoming or that the agency prioritizes alternative enforcement targets. The absence of SEC action does not necessarily signal approval; rather, it reflects the evolving nature of regulatory frameworks addressing emerging digital commerce platforms.

Temu faces potential fines of up to 4% of global revenue for GDPR violations

Temu faces significant regulatory scrutiny across multiple jurisdictions for its data handling practices. The European Union has initiated formal proceedings under the General Data Protection Regulation, with potential penalties reaching €1.35 billion, calculated at 4% of the platform's estimated €33.84 billion in global annual revenue. This investigation centers on unauthorized data transfers to China without adequate user consent or transparent privacy disclosures.

Beyond GDPR violations, the European Commission has separately identified breaches of the Digital Services Act regarding insufficient risk assessment for illegal products on Temu's marketplace. South Korea's Personal Information Protection Commission already imposed fines on the platform for similar data transfer violations in 2024. These cascading enforcement actions demonstrate a coordinated global regulatory response to Temu's data governance practices, establishing precedent for stricter compliance requirements among Chinese e-commerce platforms operating in Western markets.

Temu implements new product certification requirements to address compliance risks

Temu has significantly strengthened its compliance framework by implementing stricter product certification requirements across its marketplace. Sellers are now mandated to update and maintain valid certifications for CE, CPC, and EU documentation, with non-compliant products facing removal from the platform.

The e-commerce platform has partnered with Eurofins, a leading consumer product testing firm, to conduct comprehensive safety assessments. These evaluations cover critical areas including children's toys safety, adult apparel standards, outdoor furniture compliance with EU EN581-1 specifications, electrical safety, chemical composition analysis, and mechanical functionality testing.

This certification initiative directly addresses systemic compliance failures identified by Euroconsumers, which uncovered serious safety issues in products across multiple online marketplaces. The partnership ensures that items available on Temu meet relevant safety and quality regulations before reaching consumers.

Additionally, Temu has engaged with FITI, a leading Korean testing institute, to further enhance product quality assurance. Non-certified products pose significant risks to end-users, as they lack thorough testing validation. By enforcing stricter certification requirements and conducting rigorous third-party testing, Temu demonstrates its commitment to consumer protection and regulatory compliance, establishing clearer accountability standards for sellers while building greater marketplace transparency and trust.

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