EU regulators raided Temu’s European headquarters in Dublin last week as part of an investigation into possible Chinese state subsidies. Temu, which operates under China’s ecommerce giant PDD Holdings, is facing scrutiny over whether financial support from Beijing gave the platform an unfair competitive edge, according to a person familiar with the situation.
Temu did not provide a comment when asked to respond to the raid.
This development comes as the European Union prepares to tighten rules on low-value ecommerce imports. For years, parcels worth under 150 euros have benefited from a customs exemption, allowing platforms such as Temu and Shein to ship inexpensive goods into the bloc without paying duties. European retailers argue that this system has distorted competition. The EU plans to end the exemption by late next year.
The investigation falls under the European Commission’s Foreign Subsidies Regulation (FSR), which targets companies believed to be receiving unfair financial support from foreign governments. The goal is to create a more level playing field for EU-based businesses.
A spokesperson for the Commission confirmed that an unannounced inspection had taken place at a company operating in the EU’s ecommerce sector. However, the spokesperson did not reveal the name of the company or the exact location of the raid.
Temu, known for offering extremely low-priced products ranging from electronics to home goods and clothing, has rapidly expanded across global markets. Its slogan, “shop like a billionaire,” reflects its aggressive positioning in the discount retail space. Since its launch in the United States in September 2022, the platform has attracted tens of millions of users worldwide. In the EU alone, the service averages around 116 million monthly users.
Regulatory raids of this kind typically occur when authorities have substantial indications of possible violations. These signs may come from whistleblowers or internal investigations. Raids can also lead companies to negotiate or cooperate with regulators in hopes of reducing potential penalties.
