Temu ‘obstructed EU inspection’ in Dublin
The European Commission has begun infringement proceedings against the Chinese-owned parent company of online retailer Temu for possible obstruction of an inspection carried out in Dublin late last year.
The EU body carried out the unannounced inspection at the premises of PDD Holdings’ subsidiary WhaleCo, through which it operates Temu in the EU, in December.
The inspection was aimed at gathering evidence for an investigation under the Foreign Subsidies Regulation (FSR) into whether Temu may have received foreign subsidies that could distort the EU’s internal market.
The FSR was aimed at addressing what the EU described as “a regulatory gap”, whereby subsidies granted by EU member states are closely scrutinised under state-aid rules, but those granted by non-EU governments go unchecked.
Requests for information
In a statement, the commission said that it had preliminarily found that Temu had infringed its duty to actively co-operate on “multiple aspects” related to the conduct of the inspection.
It cited an alleged failure to comply with requests for information on the organisation and management of Temu's activities in the EU, as well as IT tools and systems and “specific books and records” linked to its EU operations.
The EU body stresses that the proceedings relate only to the company’s behaviour during the inspection and not to the probe into foreign subsidies.
Obligations
If the commission's preliminary findings are confirmed, the conduct would be an infringement of Temu's procedural obligations under article 14 of the FSR.
The EU body says that the sending of a statement of grounds – the first step in the procedure – does not prejudge the outcome of the investigation, adding that Temu can now reply to the commission's concerns.
Temu has said that it will look at the commission’s statement, saying that it "co-operated fully and complied with all the requests” during the inspection.