The Commission issued a statement of grounds on 31 July setting out its preliminary concerns following an unannounced inspection conducted between 2 and 5 December 2025 at WhaleCo’s offices in Ireland.

The inspection formed part of an investigation under the Foreign Subsidies Regulation (FSR) into whether Temu may have received foreign subsidies capable of distorting competition within the EU’s internal market.

The inspection, carried out with the assistance of Ireland’s Competition and Consumer Protection Commission (CCPC), sought evidence relating to Temu’s operations in the European Union. The Commission said it had preliminarily found that the company failed to fulfil its obligation to actively co-operate during the inspection.

According to the Commission, Temu “failed to comply with several basic requests” made during the inspection. Those requests related to information on the organisation and management of the company’s activities in the EU, the IT tools and systems it uses, and the provision of specific books and records concerning its European operations.

The Commission said such requests are standard practice in competition investigations and are typically made at an early stage. It added: “Not providing the information prevented the Commission from reviewing sources of information that could be relevant for its investigation.”

The proceedings concern only the company’s conduct during the inspection and are separate from the underlying investigation into alleged foreign subsidies. The Foreign Subsidies Regulation, introduced to address what the EU has described as a regulatory gap in the treatment of subsidies granted by non-EU governments, enables the Commission to investigate whether foreign financial support distorts competition in the single market. 

If the preliminary findings are confirmed, the alleged conduct could amount to a breach of Temu’s procedural obligations under Article 14 of the regulation. Companies found to have infringed the rules may face fines of up to one per cent of annual turnover.

The Commission stressed that issuing a statement of grounds does not prejudge the outcome of the proceedings and that Temu has the opportunity to respond to its concerns.

Temu rejected the allegation, saying that it “co-operated fully and complied with all the requests” during the inspection.

A CCPC spokesperson confirmed that the Irish authority assisted the European Commission during the inspection but said it “had no involvement in the European Commission’s investigation following the conclusion of the inspection, and is not involved in the Commission’s decision to issue a statement of grounds”.

Temu entered the European market in 2023 and has attracted millions of users through its low-cost online marketplace. The company has also faced increasing regulatory scrutiny in the EU over its business practices and compliance with European rules governing digital platforms and competition.