"Misleading discounts"

Consumer advocates consider legal action against Temu

Temu was warned about misleading discount levels and manipulative designs, among other things.(Bild: AFP)

Consumer protection organizations in Germany are considering legal action against the Chinese online marketplace Temu. The company has been warned about several violations, the Federation of German Consumer Organizations (vzbv) announced in Berlin on Tuesday. 

The platform unsettles and takes advantage of consumers with seemingly arbitrary discounts, questionable ratings and manipulative designs. This has to stop, vzbv boss Ramona Pop is quoted as saying in the press release. Consumers must be protected from such business practices.

Whaleco Technology Limited, the company behind the online platform, has reportedly responded to the warning. However, a cease-and-desist declaration has not been issued. The consumer advice center wants to "decide on a lawsuit against Temu next". An internal coordination process is currently underway to this end, it said when asked.

Temu, meanwhile, feels misunderstood by the consumer advocates - especially when it comes to the intentions behind the platform's business model: the company is committed to "ensuring that our practices are fair", a spokesperson said. "We welcome the opportunity to work with consumer groups to improve transparency and adapt our platform to local preferences."

Misleading discounts
Among other things, the vzbv accuses the online marketplace of leaving consumers in the dark about how the high discounts advertised come about. The platform also advertises that the CO2 footprint is reduced if the ordered goods are delivered to a pick-up point rather than to your home. However, the products have already traveled long distances by the time they are delivered.

Temu defended itself against the accusations: "Many of our sellers are manufacturers who traditionally supply brick-and-mortar stores," the spokesperson said. They use their recommended prices, which are based on those in the stores, and highlight the savings on this basis. "They also believe that pick-up points are a more environmentally friendly delivery option than home delivery. Deliveries would be bundled and multiple delivery attempts would not be necessary.

Manipulative design
The vzbv also criticized the fact that consumers were put under pressure during the ordering process - with messages such as "Hurry up! Over 126 people have this item in their shopping cart" and "More than 54 users have bought repeatedly! Why not 2 at once ...". The consumer advice center sees this as a manipulative design, so-called dark patterns. This was banned by the EU with the Digital Services Act passed in February.

In the view of the consumer advice center, Temu also provides insufficient information on whether the authenticity of product reviews is guaranteed. There was also a lack of information about the identity of product providers.

Temu also countered these accusations: "The stock and purchase updates reflect the real state of stock and are intended to help consumers make informed decisions, not to be manipulative or coercive."

The authenticity of reviews is also taken seriously: "We never delete or suppress negative reviews - on the contrary, we provide special filters for them because we believe they can help verify retailers and encourage them to improve their product quality and service," it said.

Rapid rise
Temu recently caused a stir with discount offers of up to 90 percent. The company, which does not act as a seller itself but only provides retailers with its marketplace as a platform, has quickly established itself on the European market. 

Trade experts and associations had recently called for stricter action to be taken against Chinese low-cost marketplaces such as Temu. In February, European toy manufacturers also criticized the safety of products from retailers on the platform and called for stricter controls.