The company has flooded the European and U.S. online markets in recent months.Continue reading
Non-existent discounts, psychological pressure, and misleading green messages can be used by online marketplaces, the Hungarian Competition Authority (GVH) warned. It has also announced that it will open a competition investigation against Temu, reports Magyar Nemzet.
As previously reported, several notifications are pending concerning the commercial practices of Chinese online marketplace Temu. According to the data available, Whaleco Technology Limited, a company registered in Ireland, is likely to engage in price disclaimers and promotions on its website and through the Temu mobile app, which may be likely to mislead consumers. The company communicates discounts of “up to 95%” (or higher) on certain product categories for the products it sells, but no such discount is found in the results when clicking on the category.
The GVH also found that Temu publishes urgent information on the availability of products throughout the purchase process in the context of its promotional offers for products available on its website and mobile app, such as: “Only 4 left,” “Almost sold out,” “Purchased 1 minute ago,” “Hurry! More than x people have added this product to their cart,” “Wanted! x sold in the last 24 hours,” “x people have recently rated this product with 5 stars.”
These messages, through their content and visual presentation, are likely to have the overall effect of urging consumers and putting them under psychological pressure to make a decision to buy the product.
Photo via Facebook/Temu Hungary
The GVH also found that by including the statement ‘Socially responsible – Doing good for the world,’ among the values published and professed on the website in the link to ‘About Temu,’ the website was likely to engage in a commercial practice that was misleading as to the essential characteristics of the products, in particular their environmental impact.
On the basis of the above, the GVH is opening a competition investigation against Whaleco Technology Limited, the operator of the Temu online marketplace, for alleged infringement of the prohibition of unfair commercial practices against consumers.
The opening of competition proceedings does not imply a finding that the company has committed the infringement. The investigation period is set at three months, which may be extended twice, each time for a maximum of two months, where justified. The maximum fine that can be imposed in a competition procedure is 13% of the annual turnover of the international group of undertakings concerned.
The GVH also noticed that Temu promotes its products on various social media sites with Hungarian influencers who have a significant number of followers. In this context, the competition authority – in line with its guidelines for influencers published in November 2022 – is increasingly drawing the attention of the opinion leaders concerned to the need to comply with the rules on advertising and the possible legal consequences in case of failure to do so.
Via Magyar Nemzet; Featured image via Pexels