Millions of Europeans order a €2 phone case or a €5 dress from Temu without wondering why it is so cheap. EU inspectors tried to find out. But they say Temu failed to provide the information they needed, during an unannounced inspection in Dublin.
Commission inspectors did not call ahead. In early December, they arrived at Temu’s Dublin offices, looking for evidence that the platform’s rock-bottom prices might be propped up by subsidies from Beijing.
Investigators left with far less than they came for. On 30 July, the Commission said Temu had failed to comply with several basic requests it made during the inspection, the kind that are routine at the early stages of any such probe.
Locked out of the files
The missing pieces were not obscure. Commission officials asked for information on how Temu organises and manages its EU operations. They wanted to know which IT systems it uses. They also asked for specific books and records tied to its business in the bloc. Companies must legally hand this over once an inspection is ordered.
Not receiving it, the Commission says, kept its investigators from reviewing sources. Those sources could matter to the case. If the preliminary findings hold, Temu will have breached its procedural duties. These duties fall under the Foreign Subsidies Regulation (FSR). The FSR is the EU tool designed to stop foreign cash from distorting competition in the single market.
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Temu is not without options. The Statement of Grounds gives the company the right to access the case file. It can also respond to the allegations before any final decision is made.
The obstruction case runs on its own track. It leaves untouched the Commission’s central question. Did a third country’s money help Temu undercut its rivals on European shelves? That inquiry continues in parallel. Today’s development neither confirms nor dismisses it.
Two investigations, one company
The FSR itself is a relatively new instrument. Since it took effect in 2023, it has given Brussels powers once reserved for policing subsidies handed out by its own member states, extended for the first time to money arriving from outside the bloc.
Obstructing an FSR inspection can cost a company one per cent of its turnover.
That breach now carries its own price tag, separate from any findings on the subsidies themselves. Obstructing an FSR inspection can cost a company one per cent of its turnover. For a platform built on volume and speed, a drawn-out fight over paperwork is an unfamiliar kind of friction. Whatever the underlying subsidy probe eventually finds, Temu will first have to explain why it kept its own paperwork out of reach.
