Retail News CRM

Tag: Action

  • EU Regulators Stoke Action Against Temu: Chinese Subsidy Probe Targets Dublin HQ

    EU Regulators Stoke Action Against Temu: Chinese Subsidy Probe Targets Dublin HQ

    Last week, EU regulators conducted an unannounced raid on the Dublin-based European headquarters of Temu, an online retailer and subsidiary of China’s e-commerce titan, PDD Holdings. The action arose from concerns regarding potential Chinese state subsidies extended to the company.

    As of yet, Temu has not issued a response to the matter.

    This event coincides with escalating concerns within the EU about an influx of inexpensive Chinese imports. The surge has come via low-value e-commerce shipments, largely due to a customs exemption on packages valued under 150 euros. European retailers argue that this waiver gives e-commerce platforms such as Temu and Shein an undue competitive edge. To address this, the EU executive intends to eliminate this duty exemption by year-end.

    The Foreign Subsidies Regulation (FSR)

    The European Commission’s Foreign Subsidies Regulation (FSR) has been enacted to address this issue. Its purpose is to curb competition from non-EU companies that receive subsidies from their respective governments. The FSR empowers the Commission to levy penalties equating to 10% of a company’s aggregated yearly turnover for any infractions.

    The Commission confirmed it executed an unannounced inspection on an EU-based e-commerce business under the FSR. However, they have not disclosed the identity of the company or the location of the raid.

    Temu’s Global Success and Troubles with EU Authorities

    Temu has amassed a global customer base in the tens of millions via its online store. The e-commerce platform sells a wide range of items from smartphones to duvet covers and leggings at incredibly low prices. This has even prompted Amazon to introduce its rival service, ‘Amazon Haul’.

    Under the tagline “shop like a billionaire”, Temu has attracted approximately 116 million average monthly users in the EU, according to its most recent transparency report. This is an impressive feat considering it only expanded into the European market in April 2023.

    EU regulators typically conduct raids when they have evidence of regulatory violations, which can originate from whistleblowers or their own investigations. These actions often result in companies offering concessions or cooperation in exchange for reduced penalties.

    However, this is not Temu’s first encounter with EU authorities. The Commission initiated an investigation into Temu under the Digital Services Act, a regulation overseeing online platforms, last year. In July, the Commission released preliminary findings claiming that Temu has not done enough to prevent the sale of illegal products on its platform.

    Foreign subsidies may come in various forms such as zero-interest loans, below-cost financing, tax breaks, or preferential tax treatment, among others.

    In November, China’s trade surplus exceeded US$1 trillion for the first time, with manufacturers rerouting more goods to non-US markets due to tariffs, resulting in an export boom to Europe, Australia, and Southeast Asia.

    Questions & Answers

    What spurred the raid on Temu’s headquarters by EU regulators?
    The raid was prompted by concerns regarding potential Chinese state subsidies to the online retailer.

    How does the EU’s Foreign Subsidies Regulation (FSR) aim to address competition from non-EU companies?
    The FSR aims to curb competition from non-EU firms that receive government subsidies. The regulation allows the Commission to impose fines of up to 10% of a company’s annual aggregated turnover for breaches.

    What were the findings of the European Commission’s previous investigation into Temu?
    The Commission’s preliminary findings suggested that Temu was not taking sufficient actions to prevent the sale of illegal products on its platform.

  • Singapore’s Electronics Giants, Courts and Prism+, Face Legal Action for Misleading Consumers: Unfair Trading Exposed

    Singapore’s Electronics Giants, Courts and Prism+, Face Legal Action for Misleading Consumers: Unfair Trading Exposed

    Two Singapore-based electronics and home appliance retailers, Courts and Prism+, are currently facing legal action. This action is being brought by the country’s consumer protection agency, the Competition and Consumer Commission of Singapore (CCS), due to allegations of misleading online customers.

    Alleged Misleading Practices

    The CCS has determined that both Courts and Prism+ have violated trading laws. The retailers are accused of either charging consumers for items they did not select or implementing website features that falsely encourage immediate purchasing decisions.

    In particular, Courts’ website was reported to automatically add certain items to consumers’ carts during promotional periods, without the shoppers’ approval. This practice risks consumers unintentionally paying for additional, unwanted items. An instance of this was when a consumer chose an Apple iPad for purchase, and an Acer vacuum cleaner was subsequently added to their cart without their knowledge.

    Despite receiving customer complaints about these issues early last year, Courts did not amend their practices until the CCS intervened in June.

    Generating False Urgency

    In a separate investigation, the CCS discovered numerous design features on Prism+’s website that pressured customers into making rushed buying decisions.

    The features identified included unauthentic countdown timers for product discounts, which would reset once they reached zero. Additionally, deceptive stock indicators were used, falsely stating that certain products were ‘running low’. Overstated discounts were also observed.

    According to the CCS, these practices by Courts and Prism+ are considered to be unfair trade practices under Singapore’s fair trading laws.

    Corrective Measures

    Courts has pledged to immediately halt these deceptive practices, make adjustments to its website, and provide refunds to affected customers. Similarly, Prism+ has rectified its website’s issues and has promised not to engage in any unfair trade practices in the future.

    “COURTS confirms that it had been contacted by the Competition and Consumer Commission of Singapore (“CCS”) regarding design features on its website that may have misled consumers.

    The issue resulted from legacy marketing practices, which are aligned with COURTS’ promotions in its physical stores, where consumers were offered the option to purchase an additional item at a discounted rate after their purchase of an item.

    After being made aware of the issue, COURTS had given an undertaking to CCS to cease this practice immediately. Following which, we have made changes to our website to rectify the issue and processed refunds to all affected customers.

    COURTS had been working closely with CCS since June 2025 to resolve the issue. Since September 2025, the issue had been fully rectified, and we have not received any recent customer complaints. We have also reviewed our website thoroughly to ensure all information are accurately displayed, so as to deliver a transparent shopping experience for customers and to minimise confusion.

    We regret the impact this incident may have had on our customers and are fully committed to enhancing our consumer protection policies to prevent similar occurrences in the future.”

    Questions & Answers

    What actions are Singapore-based retailers Courts and Prism+ facing?
    They are facing legal action from the country’s consumer watchdog, the Competition and Consumer Commission of Singapore (CCS), for allegedly misleading online customers.

    What practices led to these legal actions?
    Courts is accused of automatically adding items to consumers’ shopping carts without their consent, and Prism+ is alleged to have used various website features to pressure consumers into hasty purchases.

    What measures are Courts and Prism+ taking in response to these allegations?
    Courts has pledged to halt these practices, update its website, and refund affected customers. Prism+ has also committed to making necessary changes to its website and not engaging in any unfair trade practices in the future.