Faulty baby pacifiers. Toxic children's raincoats. Cosmetics with banned chemicals. These are just some of the products recently purchased through an EU-wide mystery shopper operation on major e-commerce platforms Temu and Shein.
The findings may have widespread implications for e-commerce platforms — and not just those doing business in Europe. Keep reading to learn more about the investigation, the potential financial penalties, the growing global spillover risk, and the best approaches for mitigating your exposure.
What Is the EU's Investigation About?
In 2024, the European Commission began a preliminary inquiry into the practices of e-commerce platforms Temu and Shein to ascertain whether they had breached the Digital Services Act (DSA), an EU law adopted in 2022 that regulates online platforms to prevent "illegal and harmful activities online" as well as the spread of disinformation. The Commission suspected the platforms of various violations, including the sale of illegal products and the use of potentially addictive designs meant to drive sales.
What followed was an investigation that included mystery shopping on the platforms to ascertain the safety of various products. Among the most problematic findings were unsafe baby toys and small electronics, which could cause health risks, injury, or even death. As a result, the Commission preliminarily found Temu in breach of the DSA, stating that there was "a high risk for consumers in the EU to encounter illegal products on the platform."
"In our preliminary view, Temu is far from assessing risks for its users at the standards required by the Digital Services Act," said Henna Virkkunen, executive vice president for tech sovereignty, security, and democracy at the Commission.
After viewing the mystery shopper findings, EU Commissioner Michael McGrath told The Guardian he was determined to crack down on the widespread availability of dangerous products on e-commerce platforms: “I am shocked by it, and I think we have a duty to protect European consumers.”
The Financial Stakes are Real — And They’re Large
The DSA is not a framework with symbolic penalties. For companies designated as a Very Large Online Platform (VLOP) or Very Large Online Search Engine (VLOS) — categories covering roughly 20% of the world's largest platforms — violations can be severe and trigger:
- Fines of up to 6% of global annual revenue
- Periodic penalties of up to 5% of average daily worldwide revenue for every day a company fails to comply with remediation orders
- Enhanced supervision periods requiring ongoing proof of compliance
To put that in context: for a platform generating $10 billion in annual revenue, a 6% fine represents a $600 million exposure — from a single enforcement action.
European regulators are determined to enforce the DSA. In February, The European Commission opened formal proceedings against Shein. As part of the investigation, authorities are looking at how the platform detects and removes unlawful goods offered by third-party sellers.
The investigation appears to be having a ripple effect. Already, other platforms are working hard to ensure that they are complying with DSA laws.
The Risk Doesn't Stop at the EU Border
The EU crackdown on dangerous consumer goods is not merely a European problem. It's a global one — and the risk is actively moving.
When the EU tightens its enforcement standards on hazardous products, those products don't disappear from the market. They often get redirected. Sellers blocked or penalized on EU-accessible platforms may pivot, seeking out new channels with less scrutiny. That migration tends to flow toward markets with less mature regulatory oversight. Products European regulators deem too dangerous for their own citizens can end up in the portfolios of platforms and merchants operating elsewhere.
US tariffs may be compounding this dynamic. As Chinese exporters who had been routing inventory through American channels faced additional pressure, the EU market absorbed more of that volume. Now, as the EU cracks down on noncompliant goods (and enacts its own customs tax for small parcels), those same goods are looking for the next available market.
The downstream consequences for non-EU businesses are real: increased regulatory scrutiny as other jurisdictions follow the EU's lead, card brand exposure under Visa and Mastercard rules governing prohibited product categories, and significant reputational risk when dangerous products surface on a platform regardless of where its headquarters are located.
Every platform and merchant portfolio processing consumer goods transactions globally should be asking: do we have visibility into what's actually being sold in our ecosystem?
How Can You Mitigate Your Risk?
Effective risk management is a complex undertaking that requires ongoing effort. A comprehensive approach should include robust policies, careful seller vetting, and persistent platform monitoring to quickly identify and remove violative products, sellers, ads, and other content.
LegitScript's Platform Risk Solutions are uniquely positioned to help e-commerce marketplaces, social media companies, and search engines manage and mitigate their risk. We monitor online products, sellers, ads, and other content for regulatory and product risks across jurisdictions, helping protect your brand, your users, and your bottom line.
How LegitScript Helps You Stay Ahead
Our team brings unmatched expertise in high-risk content and commerce, a deep understanding of global regulatory frameworks, and a proven track record of supporting platform trust and safety at scale. In other words, our Platform Risk Solutions capabilities are built for exactly the kind of environment this moment has created: one where the risk is global, the standards are shifting, and the consequences of missing something are significant.
Here's what that looks like in practice:
- Precision detection at scale. LegitScript monitors content across more than 60 high-risk categories using a combination of AI, regulatory intelligence from 175+ global regulators, and expert analyst review — identifying what automated systems routinely miss.
- Enforcement-ready intelligence. We don't just surface risk. We deliver prioritized, actionable results with the context your compliance and trust-and-safety teams need to act decisively.
- Global regulatory coverage. Our team tracks consumer safety alerts, enforcement actions, and product prohibition notices across jurisdictions — so when a product category comes under regulatory fire in Europe, you know what that means for your business before it becomes a problem.
- Trusted by the platforms that set the standard. Leading search engines, marketplaces, and social platforms partner with LegitScript to manage product and merchant risk at scale. Recently, one of the world's largest online platforms chose LegitScript for exactly this kind of monitoring.
The Right Question to Be Asking
The EU investigation into Temu and Shein was a warning for the entire industry, not just for two companies. The regulatory scrutiny of dangerous products in online commerce is intensifying. The financial stakes attached to getting it wrong are rising. And the supply of noncompliant goods seeking new channels is, if anything, growing.
The question isn't whether your platform or portfolio has exposure to dangerous product risk. The question is whether you have the visibility to manage it.
Contact LegitScript to schedule a brief conversation about how we can help you stay ahead of what's coming.
