EU raids Temu Dublin offices in subsidy breach probe

(Sharecast News) - European Union regulators have raided the Dublin headquarters of Chinese online retailer Temu over a potential breach of foreign subsidy rules, officials said on Thursday.

The raid took place last week without warning or publicity afterwards, according to several media reports.

"We can confirm that the commission has carried out an unannounced inspection at the premises of a company active in the e-commerce sector in the EU, under the foreign subsidies regulation," a European Commission spokesperson told the Guardian.

The EU regulation targets companies judged to have been given a competitive advantage through the receipt of government subsidies.

Some Chinese car makers were last year hit with tariffs of up to 38% after an investigation under World Trade Organisation rules found the companies were receiving direct and indirect subsidies from the Chinese government.

Temu is already under an EU investigation opened last year under its 2022 Digital Services Act, with preliminary findings in July showed the retailer was not doing enough to prevent the sale of illegal products.

The probe could lead to a fine of up to 6% of the company's global annual revenue if it is found in breach of the legislation.

Temu's marketplace sells a range of products from mobile phones to clothes and sports equipment at low prices and has swiftly grabbed market share since it started trading in Europe in 2023.

Individual orders are shipped from warehouses in China directly to consumers' homes, helping them avoid import duties.

Reporting by Frank Prenesti for Sharecast.com