EU Accuses Temu of Obstructing Subsidy Probe... Faces Fine of Up to 1% of Revenue

The European Union has pointed out that Chinese e-commerce company Temu obstructed an investigation under EU foreign subsidy regulations last December.

The European Commission announced on the 31st (local time) that Temu violated its obligation to cooperate with the investigation during a raid on its European headquarters located in Dublin, Ireland, last December.

The European Commission conducted the on-site inspection to secure evidence, suspecting that Temu may have received subsidies from the Chinese government to secure an unfair competitive advantage in the European market.

The EU stated that it requested the submission of materials (or information) and records regarding Temu's business organization and operational methods in Europe, as well as IT tools and systems used for its EU business, but Temu repeatedly failed to comply during the on-site inspection.

If Temu is ultimately found to have obstructed the EU's investigation, it could be fined up to 1 percent of its total annual turnover.

In response, Temu issued a statement denying the claims, saying, "Temu fully cooperated with all requests from the Commission at the time and faithfully fulfilled the requests."

It also argued, "Temu generates sustainable cash flow through its own commercial activities, which is sufficient to operate its business within the EU," adding that it has never received subsidies that distort the market.

Meanwhile, the EU, struggling with a massive influx of low-cost Chinese goods, has recently stepped up crackdowns on Chinese e-commerce platforms, including Temu, Shein, and AliExpress.

Starting from the 1st of this month, the EU began imposing a fee of 3 euros (approx. 5,000 won) per item on low-cost packages originating from China. In May, it imposed a fine of 200 million euros (approx. 332 billion won) on Temu for failing to proactively prevent the sale of illegal goods through its platform.
※ Please note: This article was translated by AI and may contain errors.