Temu hit with EU charges for not cooperating in December raid

By Inti Landauro

BRUSSELS, July 31 (Reuters) - The European Commission said on Friday it had charged Chinese online retailer Temu with not cooperating with investigators during a December raid on its European headquarters in Dublin as part of a subsidy investigation. 

The charges could result in a fine of up to 1% of Temu's total annual turnover. 

The raids were part of an investigation under the EU Foreign Subsidies Regulation into whether Temu, a unit of PDD Holdings, has received state aid which may have given it an unfair advantage in Europe.

Temu in a statement said it disagreed with the Commission's charges and denied receiving distorting subsidies.

The Commission, which acts as the EU competition enforcer, said Temu failed to comply with several requests for information during the raids.

"Those requests concerned the provision of information on the organisation and management of Temu's activities in the EU and the IT tools and systems used by the company for its activities in the EU, as well as to the provision of specific books and records on the company's activities in the EU," it said in a statement.

Temu said it had cooperated fully and complied with all the requests made by the Commission during the inspection.

The EU has been taking measures to stem the flow of cheap imports from China through e-commerce platforms such as Temu, Shein and AliExpress, including by imposing a €3 fee from July 1 on small parcels from China, which had previously been duty-free.

"The Company generates sustained cash flows from its own operating activities that are sufficient to fund Temu's operations in the EU. We do not need to count on "foreign subsidies" to fund any competitive activities or to create any competitive advantage in the internal market," it said.

In a separate case, Temu was fined €200 million ($230 million) by the Commission in May for not doing enough to stop the sale of illegal products on its platform.

($1 = 0.8699 euros)

(Reporting by Inti Landauro, Editing by Charlotte Van Campenhout, Kirsten Donovan)