The EU on Thursday hit Chinese-founded shopping platform Temu with a probe over concerns the site is doing too little to stop the sale of illegal products, in an investigation that could lead to large fines.Extremely popular in the European Union despite having entered the continent’s market only last year, Temu has on average around 92 million monthly active users in the bloc.The investigation will also look at dangers from the platform’s use of gamification and “potentially addictive design” that could hurt users’ “physical and mental well-being,” said the European Commission, the EU’s powerful digital watchdog.The probe is being launched under a mammoth law known as the Digital Services Act (DSA) that forces the world’s largest tech firms to do more to protect European consumers online.”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 tech chief Margrethe Vestager said in a statement.The EU wants to know more about the systems Temu has in place to “limit the sale” and how it avoids the “reappearance” of illegal products — once removed — such as pharmaceuticals, chemicals and toys as well as counterfeit goods.The company said it “takes its obligations under the DSA seriously”.”We will cooperate fully with regulators to support our shared goal of a safe, trusted marketplace for consumers,” a Temu spokesperson said in a statement.Temu is in talks about joining a European agreement facilitated by the commission that brings shopping platforms and others together to stop the sale of fake products online.- ‘Promising step’ -The company will also have to explain what measures it is taking to address any risks from its service, including game-like reward programmes.The probe comes after Temu submitted a risk assessment report to the EU, as well as replies to several demands for information, the latest issued on October 11.The firm can avoid fines if it makes commitments during the investigation that the EU believes alleviates its concerns.European consumer groups have previously warned that Temu breaches EU law.They lodged a complaint in May with the commission, accusing Temu of using “manipulative techniques” to make users spend more and other violations.Europe’s BEUC umbrella consumer rights group on Thursday welcomed the probe.”This decision by the commission is a promising step, but only the first. Now, it’s important the commission keeps up the pressure on Temu and pushes the company to comply with the law as soon as possible,” said BEUC’s Fernando Hortal Foronda.- Multiple probes -The EU probe will also look at Temu’s systems and how they recommend content and products to users and analyse the platform’s data access to researchers.Temu will also have to provide more details about the “parameters” of its recommender systems, which are used by platforms to push more personalised content.The EU stressed that the “opening of formal proceedings does not prejudge its outcome” and there is no deadline for the probe’s completion.Temu is among 25 “very large” online platforms that must comply with the DSA or risk fines that could reach as high as six percent of their global turnover, or even a ban for serious and repeated violations.Other shopping platforms that must comply with the DSA include Chinese online retailer AliExpress, US giant Amazon and Chinese-founded Shein.Other DSA investigations have targeted AliExpress, social media platform X, which is owned by tech billionaire Elon Musk and used to be called Twitter, as well as Facebook and Instagram owned by Meta.

European and Asian stocks were mostly down Thursday following a weak lead from Wall Street, as investors digested mixed company earnings and remained risk-adverse ahead of a coin-toss US election.Investors will also be eyeing US personal consumption expenditures data — the Federal Reserve’s prefered inflation measure — released later in the day for signals about the pace of future interest-rate cuts.The three main US stock indices lost ground on Wednesday, with shares in Microsoft and Facebook-parent Meta dropping in after-hours trading. Despite both tech giants delivering upbeat results, investors “baulked at the expectation of increased AI spending”, said Joshua Mahony, chief market analyst at Scope Markets.Analyst said that tech losses, including losses for the semiconductor industry, also led declines in European indices. Frankfurt retreated 0.5 percent and Paris lost 0.9, as official data showed the eurozone’s annual inflation rebounded more than expected in October due to rising food costs.Shares in French bank Societe General jumped over eight percent after it reported better-than-expected results. Meanwhile its rival BNP Paribas saw its shares slump around six percent after results fell short of expectations.London shed 0.8 percent after the new centre-left government unveiled major tax hikes, mainly targeted at businesses, in its maiden budget. “This was one of the largest increases in tax, spending and borrowing in the UK’s budget history”, said Kathleen Brooks, research director at traders XTB.”For a government that planned to boost growth, they have fallen spectacularly at the first hurdle,” she added.Tokyo fell by half a percent, weighed down by a stronger yen and a drop in stocks linked to the semiconductor industry, which also dipped on Wall Street.The Bank of Japan decided to leave its main interest rate unchanged, saying in an outlook report that there were “high uncertainties surrounding Japan’s economic activities and prices”.Stephen Innes of SPI Asset Management attributed Asian markets’ wobble to pre-vote “jitters”, saying traders were “wary of taking on new risk as the US election countdown begins”.Mainland Chinese markets, however, made healthy gains following a forecast-beating manufacturing report — in a piece of rare good news for leaders struggling to boost activity in the world’s second-largest economy.Uncertainty over the outcome of the upcoming US elections, meanwhile, buoyed safe haven gold, which touched a fresh high of $2,790.10 an ounce on Thursday. Oil prices continued their rebound, fuelled by good news on demand from the United States, as well as by press reports that OPEC countries are considering postponing an increase in crude supply.- Key figures around 1110 GMT -London – FTSE 100: DOWN 0.8 percent at 8,093.07 pointsParis – CAC 40: DOWN 0.9 percent at 7,359.92Frankfurt – DAX: DOWN 0.5 percent at 19,159.72Tokyo – Nikkei 225: DOWN 0.5 percent at 39,081.25 (close)Hong Kong – Hang Seng Index: DOWN 0.3 percent at 20,317.33 (close)Shanghai – Composite: UP 0.4 percent at 3,279.82 (close)New York – Dow: DOWN 0.2 percent at 42,141.54 points (close)Euro/dollar: UP at $1.0865 from $1.0861 on WednesdayPound/dollar: UP at $1.2986 from $1.2969Dollar/yen: DOWN at 152.69 yen from 153.35 yenEuro/pound: DOWN at 83.64 from 83.75 penceBrent North Sea Crude: UP 0.5 percent at $72.52 per barrelWest Texas Intermediate: UP 0.5 percent at $68.94 per barrel