Temu has denied receiving foreign subsidies that gave it an unfair advantage in Europe, pushing back after the European Commission accused the online retailer of failing to cooperate fully during an inspection at its European headquarters. 

The Commission sent a Statement of Grounds to Temu’s parent company PDD Holdings and its subsidiary WhaleCo Technology Limited following an unannounced inspection at WhaleCo’s premises in Dublin between December 2 and 5, 2025. 

However, the document does not amount to 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. 

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 will now examine the document and submit a formal response, expressing confidence that Brussels will reconsider its position. 

At the same time, the retailer “categorically rejects any claim that it has received foreign state subsidies that distort competition in the internal market of the European Union”, stressing that it remains 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,” the company said. 

According to the Commission’s preliminary findings, 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. 

Brussels said the missing information prevented investigators from examining sources that could have been relevant to the subsidy inquiry. Temu disputes that account and says it provided everything requested. 

If the Commission’s findings are confirmed, the alleged failure to cooperate could amount to a breach of the company’s procedural obligations under the Foreign Subsidies Regulation and carry a fine of up to 1 per cent of PDD Holdings’ annual global turnover. 

The regulation, which began applying in July 2023, allows Brussels to investigate financial support granted by non-EU governments when it may give companies an unfair advantage within the single market. 

The latest dispute comes as Temu faces broader scrutiny in Europe. In a separate case, the Commission imposed a €200 million fine in May after finding that the platform had failed to assess adequately the risk of illegal and dangerous goods reaching European consumers. 

The platform also has a sizeable customer base in Cyprus. More than 100,000 parcels, containing around 400,000 different product categories, arrived on the island during the first 15 days of July despite the introduction of the EU’s new €3 customs duty. The charges generated around €1.2 million, while monthly parcel orders were expected to reach between 200,000 and 250,000. 

Concerns have also previously reached Cypriot authorities. In 2024, the Consumer Protection Service published a list of recalled toys sold through Temu and urged buyers to stop using them immediately. 

Temu concluded that it “remains committed to continuing its cooperation with the European Commission and to complying with all legal obligations arising from European Union law”.