The European Commission has focused on Temu for his alleged lack of cooperation during a surprise inspection carried out at the end of last year. The European Commission believes that the Chinese platform, owned by PDD Holdings, failed to fulfill its obligation to actively cooperate on several key issues, which could result in a financial penalty. The case has generated intense debate about the regulatory pressure on Temu in the European market.
The investigation, which began in December 2025, seeks to determine whether Temu has benefited from foreign subsidies that distort competition in the European Union. Brussels has already sent a statement of charges to the company and its Irish subsidiary, WhaleCo Technology Limited, in which it expresses concern about possible obstruction of the inspection process. The company, for its part, has categorically denied the accusations and maintains that it acted in good faith.
Details of the inspection and the charges
Between December 2 and 5, 2025, Commission inspectors made unannounced visits to WhaleCo's offices in Dublin. The aim was to gather evidence regarding possible public subsidies that Temu would have received and which could have given it an unfair advantage over its European competitors. According to the European Commission, the platform did not provide essential information about the organization and management of its activities in the EU, nor about the IT tools and systems it uses to operate in the single market.
Furthermore, Temu also failed to hand over certain books and accounting records requested by the inspectors. The Commission describes these omissions as a “failure to comply with the obligation to actively cooperate”This, in their view, prevented the examination of information sources that could have been relevant to the investigation. The company now has the opportunity to present its case, but Brussels has already indicated that it considers there to be “sufficient evidence” of the infringement.
Possible sanctions and reactions from Temu
If the obstruction is ultimately confirmed, Temu faces a fine of up to 1% of its global annual turnoverThis sanction would be in addition to the main investigation, which is ongoing and could lead to more severe measures if it is proven that the company received foreign subsidies that distort the internal market. The Commission has reiterated that, under the Foreign Subsidies Regulation, it has the power to impose periodic fines if recipients do not cooperate.
For its part, Temu has responded forcefully. The company asserts that it “does not share” Brussels’ preliminary conclusions and maintains that fully cooperated during the inspectionThe company has complied with all requests made. In a statement, the company categorically denied receiving unfair foreign subsidies, emphasizing that its EU operations are financed with its own cash flow generated by its business activities. “We do not need to resort to foreign subsidies to finance any competitive activity,” the platform stated.
European context and next steps
The Temu case is not an isolated incident. The European Union has been tightening its control over major Asian e-commerce platforms for some time. Recently, Brussels imposed a AliExpress fined 550 million euros for violating the Digital Services Act in relation to the sale of illegal and counterfeit products. Although this case is different, it reflects the increasing regulatory pressure on these companies.
Temu has around 130 million users in the EU, making it one of the largest online retailers in the region. The company is confident that the Commission will reconsider its position after reviewing its arguments, while the EU body continues its main investigation into the alleged subsidies. The outcome of this process could set an important precedent for the regulation of foreign subsidies in the European digital market.
The European Commission has made it clear that a lack of cooperation during an inspection is not a mere formality, but an infringement that can have financial consequences. While Temu maintains its innocence and claims to have acted correctly, the case remains open and the pressure on the platform continues unabated. The investigation into foreign subsidies is progressing in parallel.And both European consumers and competitors will be watching the final decision closely.
