European Union regulators carried out an unannounced raid at Temu’s European headquarters in Dublin, amid concerns that the online marketplace may have benefited from unfair government subsidies from China.
The raid comes at a time when the EU is preparing measures to curb the surge in low-value e-commerce imports. European retailers have long argued that platforms such as Temu and Shein enjoy an unfair price advantage, partly due to customs exemptions on parcels valued below €150. The European Commission plans to abolish this exemption by the end of next year.
Action Taken Under Foreign Subsidies Regulation
The investigation was initiated under the EU’s Foreign Subsidies Regulation (FSR), a framework designed to limit the competitive advantage of companies operating in the single market with financial backing from non-EU governments. The regulation aims to prevent foreign state support from distorting fair competition within the bloc.
Temu, a subsidiary of the Chinese e-commerce group PDD Holdings, has grown rapidly in recent years, attracting nearly 116 million monthly active users with its ultra-low-priced consumer goods.
Not Temu’s First Scrutiny in Europe
This latest action adds to Temu’s ongoing regulatory challenges in the EU. The company is already under investigation under the Digital Services Act (DSA) for what regulators describe as a high risk of illegal and non-compliant products being sold on its platform.
EU officials have not released detailed findings from the raid, but they have signaled that any evidence of unlawful foreign subsidies will result in strong enforcement measures.
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