European Union regulators have raided the European headquarters of online retailer Temu in Dublin amid suspicions that the platform may have received Chinese state subsidies, according to a person familiar with the matter. Temu is a subsidiary of Chinese e-commerce giant PDD Holdings.
The company has not yet responded to requests for comment.
The raid highlights growing concern within the EU over cheap imports from China, particularly low-value e-commerce shipments that have surged into the bloc. Until recently, parcels valued at under 150 euros were exempt from customs duties, a policy that European retailers argue gives platforms such as Temu and Shein an unfair competitive advantage. The European Commission has announced plans to eliminate the exemption by the end of next year.
EU Foreign Subsidies Regulation Underpins Raid
The operation falls under the European Commission’s Foreign Subsidies Regulation (FSR), which aims to curb unfair foreign government support for companies operating in the EU. Under the FSR, the Commission can impose fines of up to 10% of a company’s annual global turnover for violations.
A spokesperson for the Commission confirmed:
“We can confirm that the Commission has carried out an unannounced inspection at the premises of a company active in the e-commerce sector in the EU, under the Foreign Subsidies Regulation.”
The Commission did not name the company or disclose the location of the raid.
Raids like this are typically conducted when regulators have evidence of potential violations, which may come from whistleblowers or ongoing investigations. They can lead to companies cooperating in exchange for reduced fines or agreeing to remedial measures.
Temu’s Rapid Growth and Market Impact
Temu has rapidly gained traction in Europe, attracting tens of millions of users to its platform, which sells everything from smartphones to clothing and home goods at rock-bottom prices. The platform’s tagline, “Shop like a billionaire,” reflects its aggressive discount strategy.
According to Temu’s latest transparency report, the platform has around 116 million average monthly users in the EU, despite launching in the region in April 2023. Its growth has prompted competitors like Amazon to launch rival services such as “Amazon Haul.”
Previous Regulatory Scrutiny
This is not Temu’s first encounter with European regulators. In 2024, the Commission initiated an investigation under the Digital Services Act, which governs online platforms, finding that Temu had not done enough to prevent the sale of illegal or unsafe products through its platform.
Foreign subsidies, which may take the form of zero-interest loans, below-cost financing, tax breaks, or preferential treatment, are now being scrutinized as regulators seek to level the playing field for European companies.
China’s massive trade surplus, which exceeded US$1 trillion in November 2025, has intensified scrutiny, as manufacturers redirect goods to markets outside the US, fueling a surge of exports to Europe, Southeast Asia, and Australia.