The European Union is flexing its regulatory muscles again. This time, two tech giants face heavy penalties under the Digital Services Act and Digital Markets Act.

Temu, the Chinese e-commerce platform owned by PDD Holdings, was slapped with a €200 million fine. The European Commission found Temu failed to stop unsafe products from flooding the market. Chargers that flunked basic safety tests. Baby toys with dangerous chemicals and choking hazards. The platform’s risk assessments were shallow, incomplete, and unconvincing—exactly the kind of procedural failure the DSA targets.

This fine marks the EU’s first major enforcement against a Chinese marketplace model. Temu’s sprawling network of third-party sellers, shipping directly from Chinese factories, created a supply-chain blind spot. The Commission made it clear: claiming complexity won’t excuse dodging responsibility. Temu must submit a detailed remediation plan by late August or face steeper penalties.

PDD Holdings, Temu’s parent, is already navigating choppy waters. Despite 11% revenue growth last quarter, profits are slipping. The company plans a heavy investment push to build supply chain strength and brand presence globally. Yet, its stock hit a 52-week low amid regulatory and competitive pressures.

Meanwhile, Google is staring down its largest Digital Markets Act fine yet. EU regulators accuse Alphabet’s search engine of rigging results to favor its own services—Google Shopping, Maps, Flights—while burying competitors. This “self-preferencing” violates the DMA’s core rule: gatekeepers cannot skew rankings to benefit their own products.

Google’s investigation began in early 2024 and has now reached the fining phase. The penalty, expected to reach several hundred million euros, dwarfs previous fines issued under the DMA. But it’s still a fraction of the 10% global turnover maximum. Brussels wants compliance, not a cash grab.

Google insists the DMA forces it to degrade user experience, calling the required changes the “biggest downgrade” in its search history. The company claims only a few competitors benefit while users suffer.

The EU disagrees. It sees Google’s dominance as a chokehold on fair digital markets. The upcoming fine is just one front in a broader crackdown. The Commission is also probing Google’s AI practices, data sharing, and news ranking algorithms. Google faces orders to give competing AI services equal access to Android and search data—a major shift in how platforms govern AI ecosystems.

This regulatory tightening extends beyond Google and Temu. The EU recently reviewed the DMA and found it “fit for purpose” but flagged AI-related enforcement as a top priority for the coming years. Equal access to operating systems, data for AI training, and transparency in cloud AI bundling are now under intense scrutiny.

Apple and Meta have already been fined hundreds of millions for breaching DMA rules. Amazon and Microsoft face investigations over AI cloud service bundling. The EU’s message is clear: Big Tech’s AI edge must not turn into a gatekeeping fortress.

For Temu and Google, the stakes are high. Temu must overhaul its risk management or risk deeper penalties. Google faces a fine that will set a DMA record and force significant product changes. Both cases reveal the EU’s growing confidence in using digital regulation to rein in global tech giants—whether they hail from Silicon Valley or Shenzhen.

The EU is playing the long game. Enforcement will be relentless, focused on procedural compliance and systemic fairness. For companies operating in Europe, the era of regulatory leniency is over.