The European Commission has sent a Statement of Grounds to Temu owner PDD Holdings Inc and its subsidiary WhaleCo Technology Limited over concerns they may have obstructed an unannounced inspection at WhaleCo’s premises in Ireland.
The Statement of Grounds follows an inspection carried out between 2 and 5 December 2025 under the EU’s Foreign Subsidies Regulation, the Commission informed on Friday.
The inspection took place at the EU premises of PDD and WhaleCo in Dublin, Ireland.
The Commission said it had conducted the inspection after indications that Temu may have received foreign subsidies that distort the EU internal market, and that the purpose was to gather evidence for an ongoing investigation.
PDD is a multinational retail and e-commerce group that operates the Temu platform in the EU through its subsidiary WhaleCo.
What the Commission alleges happened during the inspection
The Commission said it has preliminarily found that Temu may have failed to actively co-operate with inspectors in several ways during the December 2025 visit.
It emphasised that the company did not comply with requests for information about how Temu’s EU activities are organised and managed, the IT tools and systems used for its EU operations, and the provision of specific books and records related to its activities in the EU.
Not providing the information prevented the Commission from reviewing sources that could be relevant to its investigation.
The Commission said that if its preliminary findings are confirmed, the conduct would amount to an infringement of Temu’s procedural obligations under Article 14 of the Foreign Subsidies Regulation.
Sending a Statement of Grounds does not prejudge the final outcome, and Temu now has the opportunity to reply to the concerns.
The proceedings concern only Temu’s behaviour during the inspection in December 2025 and run separately from the Commission’s main investigation into whether the company received potentially distortive foreign subsidies, which is continuing in parallel.
Under the Foreign Subsidies Regulation, the Commission can investigate suspected foreign subsidies and can carry out unannounced inspections, while companies are required to submit to inspections ordered by a Commission decision.
If a company refuses to submit to an inspection, or produces requested books and records in incomplete form, the Commission may impose fines or periodic penalty payments, it said, adding that any fine can be up to 1% of total turnover in the preceding business year.
