Temu and Shein: the effects of the Chinese 'invasion' on the European market The European Commission accused this Friday (31) the Chinese e-commerce platform Temu of not cooperating with an investigation into possible benefits received by the company that could have given it a competitive advantage in the European market. According to the agency, the company did not comply with requests for information made during an operation carried out in December at Temu's European headquarters, in Dublin, Ireland. Lack of collaboration can result in a fine of up to 1% of the company's total annual revenue. Investigation investigates possible advantage in Europe The investigation is conducted based on the European Union's Foreign Subsidies Regulation, a rule created by the bloc to investigate whether companies from outside Europe received support from foreign governments capable of distorting competition. The European Commission, which also acts as the European Union's competition authority, stated that the requests for information made to Temu involved data on the organization and management of the company's operations in the bloc, as well as tools, technology systems and records related to the company's activities in Europe. "These requests concerned the provision of information on the organization 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 the provision of specific books and records on the company's activities in the EU," the Commission said in a statement. Temu denies irregularities In a statement, Temu stated that it disagreed with the European Commission's accusations and denied having received foreign subsidies that distort competition. The company said it fully cooperated with the investigation and responded to requests made by authorities during the inspection. "The company generates sustained cash flows from its own operating activities that are sufficient to finance Temu's operations in the EU. We do not need to rely on foreign subsidies to finance competitive activities or create any competitive advantage in the domestic market," the company said. Temu Reuters Europe increases pressure on Chinese platforms The investigation against Temu comes at a time of greater pressure from the European Union on Chinese e-commerce platforms, such as Shein and AliExpress. The bloc has adopted measures to increase control over the entry of cheap products from China. Among them is the charge of a fee of 3 euros on small orders imported from China, which began to be taxed from July 1st. In May, the European Commission imposed a fine of 200 million euros on Temu because it considered that the platform did not do enough to prevent the sale of illegal products on its marketplace.