European Union (EU) regulators have carried out an unannounced inspection of Temu’s European headquarters in Dublin, as reported by Reuters.  

The raid was part of a probe into possible Chinese state subsidies linked to the online retailer.  

Temu, owned by Chinese e-commerce group PDD Holdings, is under scrutiny as EU policymakers intensify their focus on low-cost imports from China.  

A surge in small online parcels entering the bloc has been linked to a customs waiver on goods valued at under €150 ($175.72).  

European retailers have argued that the exemption gives platforms such as Temu and Shein a cost advantage over domestic competitors.  

The European Commission (EC) intends to abolish this duty-free threshold by the end of 2026. 

The EU raid took place under the Foreign Subsidies Regulation (FSR), which targets distortive financial support given by non-EU governments to their companies. 

Rules allow the EC to impose penalties of up to 10% of a firm’s global annual turnover if violations are established. 

Temu’s latest transparency report indicates it has around 116 million average monthly users in the EU, having only entered the market in April 2023. 

EU inspections are usually launched when regulators suspect non-compliance, based on internal checks or whistleblower information.  

Such actions can result in companies proposing remedies or cooperating in exchange for potentially lower penalties. 

Temu has already been on the radar of European regulators under a separate legal framework.  

Its global rise with ultra-cheap goods attracts price-sensitive shoppers, spurring rivals such as Amazon, which has launched its “Amazon Haul” offer in response. 

The EC, acting under the Digital Services Act, stated in July 2025 that Temu was not doing enough to prevent illegal products on its platform. 

Under the FSR, foreign subsidies include support measures such as interest-free or below-market loans, tax breaks and preferential fiscal treatment.