Dublin, Ireland. Temu has rejected the European Commission’s preliminary conclusion that it did not fully cooperate during an inspection at its European headquarters, while denying that it received foreign subsidies that distorted competition in the EU.
The Commission sent a Statement of Grounds to Temu parent PDD Holdings and subsidiary WhaleCo Technology Limited following an unannounced inspection at WhaleCo’s Dublin premises from December 2 to 5, 2025.
Inspection findings
The Commission said Temu did not comply with several requests concerning the organisation and management of its EU activities, the IT systems used for those operations, and specific books and business records.
According to Brussels, the missing information prevented investigators from examining sources that could have been relevant to its subsidy inquiry.
The Statement of Grounds does not constitute a finding that Temu received subsidies or distorted competition. It concerns the company’s conduct during the inspection, while the underlying subsidy investigation continues separately.
Company response
Temu said it disagreed with the Commission’s preliminary conclusions and maintained that it had cooperated fully and responded to every request made by investigators.
The company said it would examine the document and submit a formal response, adding that it was confident the Commission would reconsider its position.
Temu also categorically rejected claims that it received foreign state subsidies that distorted competition in the EU internal market, saying it remained committed to fair competition.
“The Company generates sustained cash flows from its own operating activities that are sufficient to fund Temu’s operations in the EU. We do not need to count on ‘foreign subsidies’ to fund any competitive activities or to create any competitive advantage in the internal market,” it said.
Potential penalty
If the Commission’s findings are confirmed, the alleged failure to cooperate could constitute a breach of procedural obligations under the Foreign Subsidies Regulation and result in a fine of up to 1 per cent of PDD Holdings’ annual global turnover.
The regulation, which began applying in July 2023, allows the Commission to investigate financial support from non-EU governments where it may give companies an unfair advantage in the single market.
