The European Commission announced its preliminary assessment that the e-commerce platform Temu failed to cooperate sufficiently with the authorities during an investigation into foreign subsidies. In the formal notification sent to PDD Holdings and its subsidiary WhaleCo Technology, it was stated that certain information, systems, and company records were not made available to investigators during an unannounced inspection carried out in Dublin in December 2025. If the allegations are confirmed, the company could face a fine of up to 1% of its total annual turnover.
Temu’s Dublin Office Was Inspected for Four Days
The inspection was carried out at WhaleCo Technology’s facilities in Dublin, Ireland, between December 2 and 5, 2025. The European Commission conducted the investigation to determine whether Temu had benefited from foreign state support that could distort competition in the European Union’s internal market. The investigation was based on suspicions that the company may have gained an unfair advantage over its competitors in Europe through foreign subsidies.
According to the Commission’s preliminary findings, Temu did not actively comply with some of the inspectors’ key requests. The requested information included the organization and management of the company’s activities in the EU, the information technology tools and systems used in its European operations, and certain business books and records. The Commission stated that the failure to provide these documents prevented investigators from examining potential sources of evidence.
Temu Rejected the Allegations
Temu stated that it disagreed with the European Commission’s preliminary assessment and had fully responded to all requests throughout the inspection. The company also argued that it had not received any foreign subsidies that could distort competition in Europe. Temu said it generated sustainable cash flow from its operations and did not need foreign state support to finance its operations in the EU or gain a competitive advantage in the internal market.
PDD Holdings, the owner of Temu, and WhaleCo Technology, which manages its European operations, will be able to access the European Commission’s file and submit a formal response to the preliminary findings before a final decision is made. The Commission emphasized that the current proceedings concern only the company’s conduct during the December inspection, while the main investigation into whether Temu received foreign support that distorts competition is continuing separately.
Temu Could Face a Fine of Up to 1%
It was stated that, if the allegations are confirmed, Temu could be fined up to 1% of the company’s total annual turnover. It was also noted that the EU has increased its scrutiny of low-cost e-commerce products arriving from platforms such as Temu, Shein, and AliExpress. The European Union began applying a fee of €3 to small parcels that had previously entered the region duty-free as of July 1, 2026.
Temu Previously Received a €200 Million Fine
Temu had previously faced sanctions over its digital retail operations in Europe. In May 2026, the European Commission fined the company €200 million, approximately $230 million at the exchange rate at the time, for failing to take sufficient measures to prevent the sale of illegal products on the platform. The latest proceedings are being conducted under a separate case focusing on cooperation obligations during the foreign subsidies inspection.