The European Commission on Friday accused Chinese-linked online marketplace Temu of potentially obstructing an inspection conducted under the EU's Foreign Subsidies Regulation.

The commission sent a Statement of Grounds to Temu owner PDD Holdings and its subsidiary WhaleCo Technology, outlining its preliminary concerns over the companies' conduct during an unannounced inspection at WhaleCo's premises in Dublin, Ireland.

The inspection, carried out between Dec. 2 and Dec. 5, 2025, sought evidence for a separate investigation into whether Temu received foreign subsidies that distorted competition in the EU's internal market.

According to the commission's preliminary findings, Temu failed to actively cooperate with several basic requests made by investigators.

The requests included information on the organization and management of Temu's EU operations, the company's information technology systems and specific books and records related to its activities in the bloc.

The commission said the failure to provide the requested information prevented investigators from examining potentially relevant sources of evidence.

If confirmed, the conduct would constitute a breach of Temu's procedural obligations under the Foreign Subsidies Regulation and could result in a fine of up to 1% of PDD Holdings' total turnover in the preceding business year, the Commission said.

Temu has the right to access the commission's file and respond to the preliminary findings before a final decision is adopted.

The commission said the proceedings concern only Temu's conduct during the December inspection and are separate from its continuing investigation into potentially distortive foreign subsidies granted to the company.

(AA)