EU competition authorities carried out a raid on Temu’s Irish distribution center during the week of December 1–7, 2025, after announcing the operation on December 10. The raid was part of an investigation under the European Union’s Foreign Subsidies Regulation (FSR), which allows the Commission to examine whether non‑EU governments have provided financial support that distorts competition in the internal market.
The investigation focuses on whether Temu, a subsidiary of China‑based PDD Holdings, has benefited from Chinese state subsidies that could give it an unfair advantage in the EU. While the exact subsidies are not yet disclosed, regulators are probing whether preferential treatment—such as tax breaks, export credits, or direct capital injections—has enabled Temu to undercut European rivals on price and scale.
Temu has not yet issued a formal statement. In a brief response, the company said it was cooperating with authorities and would provide all requested information. PDD Holdings’ investor relations team confirmed that the company is reviewing the situation and will issue a full comment once the investigation concludes.
The raid follows a broader EU push against Chinese‑owned platforms. The Commission has already opened investigations into AliExpress and Shein for alleged Digital Services Act violations, and it is scrutinizing Temu for similar concerns. The FSR probe adds a new layer of regulatory risk that could lead to fines or operational restrictions if subsidies are confirmed.
The timing of the raid coincides with the EU’s planned end‑of‑year crackdown on low‑value e‑commerce shipments, which will eliminate the €150 customs waiver by 2026. That policy change could increase logistics costs for Temu, which relies on inexpensive cross‑border deliveries. The combination of potential fines and higher shipping costs could pressure Temu’s margins and slow its expansion in the EU market.
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