Ministry of Social Affairs Filed Class Action Against Temu

The accusation is that customers are being enticed to disclose personal data and make generous expenditures. The legal leverage for consumer protection is provided by the law against unfair competition and the EU Digital Services Act.

The manipulation and disadvantage of customers occur through means such as prize wheels, sweepstakes, high score tables, pop-ups, time pressure, and hidden consent to advertising and data processing. Additionally, there are discounts that, upon closer inspection, are not discounts, as well as consumer-unfriendly services. Creating an account with Temu requires no more than three clicks. To delete it, seven steps and a waiting period of one week are needed.

Ministry of Social Affairs Sues Temu

"Those who cheat, lose - this also applies to international online bargain stores like Temu," emphasized SP State Secretary Ulrike Königsberger-Ludwig. Anyone doing business in Europe must adhere to European rules. "Even large platforms are not above the law," she stated to the "Standard".

However, Wifo expert Michael Böheim sees Austria's possibilities as very limited. He compares the lawsuit to the pinpricks of an acupuncturist on an elephant. Rigorous action against Temu could only be taken through the control of imports, where Asian discount platforms attempt to circumvent VAT and customs hurdles. Furthermore, European retailers must counter the platforms with their own business models - "The Kaufhaus Österreich was not one," said the economist.

Amazon Unchallenged Market Leader

Rainer Will, head of the trade association, sees the Ministry of Social Affairs' action as an important signal. However, the main problem, in his opinion, is the inadequate enforcement of EU regulations. "Although large platforms like Temu and Shein, after being designated as 'Very Large Online Platforms' under the Digital Services Act, are subject to the supervision of the EU Commission, they often circumvent EU requirements - mostly without consequence," Will complains. Temu is already the fourth largest eCommerce marketplace in Austria with a gross merchandise value of more than 340 million euros.

The unchallenged market leader in Austrian online retail is Amazon with 1.2 billion euros in direct sales. Including sales from external retailers via the Amazon marketplace, it is estimated to be 4.3 billion euros. This means that 40 percent of all online spending by domestic consumers goes to the US trading platform, according to the "E-Commerce Report 2025" by the trade association and ECDB. The second largest online retailer in the country is Zalando with 387 million euros in sales.

(APA/Red)

This article has been automatically translated, read the original article here.