PDD's (PDD) global e-commerce platform Temu has been preliminarily found in breach of the European Union's Digital Services Act related to assessing the risks of illegal products on its marketplace, the European Commission said Monday.

Analysis of a mystery shopping exercise done by the commission showed that there was a "high risk" for consumers to find illegal products such as baby toys and small electronics on the platform, according to a statement.

The Commission said it will continue its investigation and Temu can exercise its right to defend itself and reply in writing to the preliminary findings.

If the findings are confirmed, Temu could face fines of up to 6% of its total worldwide annual turnover and be required to take measures to address the issue, the Commission said.

"We will continue to cooperate fully with the Commission," a Temu spokesperson said in an email to MT Newswires.