Germany's Federal Cartel Office on Wednesday announced an investigation into Chinese e-commerce giant Temu, saying it wanted to examine conditions for traders and the company's treatment of the suppliers it relies upon to sell products. 

"Each month more than 100 million users from European marketplaces visit temu.com," Andreas Mundt, the president of the competition watchdog, said in a statement. 

Why is the Cartel Office taking action?

"For almost a year now the trading platform for German suppliers is also open. We are pursuing the suspicion that Temu could be setting unacceptable conditions for pricing for traders on the German marketplace," Mundt said. "Such actions could pose dramatic threats to competition and ultimately lead to price increases in other sales channels as a result."

The investigation formally targets EU-wide parent company Whaleco Technology Limited (Temu) based in Dublin in notoriously corporation-tax-friendly EU member the Republic of Ireland.

Temu has an estimated 19.3 million active users in Germany, the equivalent of well over one quarter of the adult population.

Reliable figures for Temu's turnover or trade volume are not available, but experts concur that its revenues spiked sharply in 2024 amid its expansion in Europe and the Americas. Estimates for annual turnover range between roughly $30 billion and $70 billion, either doubling or quadroupling 2023's figure.

Temu also faced criticism from a European Commission investigation in July this year. It accused the company of violating EU laws by not doing enough to tackle the sale of illegal products on its platform.

Edited by: Wesley Rahn