On Friday, 31 July, the European Commission issued a Statement of Grounds to PDD Holdings Inc. (‘PDD’), the parent company of Temu, and its subsidiary, WhaleCo Technology Limited (‘Whaleco’). This statement outlines concerns regarding the potential obstruction of an inspection conducted at WhaleCo’s premises in Ireland.
The inspection, which took place from 2 to 5 December 2025, was carried out without prior notice as part of the investigation into compliance with the Foreign Subsidies Regulation (‘FSR’). The Commission initiated this investigation based on indications that Temu may have received foreign subsidies that could distort the internal market. The primary objective of the inspection was to collect evidence pertinent to this investigation.
Preliminary findings from the Commission suggest that Temu did not fully cooperate with the requests made during the inspection process. In particular, the Commission has indicated that Temu failed to respond to several fundamental information requests regarding the organisation and management of its operations within the EU, as well as details on the IT systems in use and specific documents concerning its activities. These information requests are standard practice in competition investigations and are typically made at the early stages.
The lack of compliance with these requests has hindered the Commission’s ability to assess critical information relevant to the investigation. Should the preliminary findings be substantiated, this conduct could constitute a breach of Temu’s procedural obligations under Article 14 of the FSR. It is important to note that the issuance of a Statement of Grounds does not predetermine the outcome of the ongoing investigation. Temu has the opportunity to respond to the concerns raised by the Commission.
