BERLIN – Germany's Federal Cartel Office (Bundeskartellamt) has launched a formal investigation into Chinese e-commerce giant Temu, probing suspicions that the rapidly growing online marketplace is influencing merchant pricing on its German platform. The move signals a new front in European regulators' scrutiny of Temu's business practices, focusing on potential anti-competitive behavior that could impact both sellers and consumers in one of Europe's largest economies.
The antitrust proceedings target Whaleco Technology Limited, Temu’s EU-wide parent company based in Dublin, Ireland. Andreas Mundt, President of the Bundeskartellamt, stated on Wednesday that the investigation aims to examine the terms and conditions Temu imposes on sellers and other practices relating to how the company treats its suppliers. "We are investigating the suspicion that Temu could be setting unacceptable conditions for pricing for traders on the German marketplace," Mundt said. Such actions, he warned, "could pose dramatic threats to competition and ultimately lead to price increases in other sales channels as a result."
Deep Dive into Allegations: Undermining Price Freedom
The investigation by the Bundeskartellamt stems, in part, from a complaint filed earlier this year by the German Trade Association (HDE)., The HDE has accused Temu of deliberately restricting the price autonomy of its trading partners, thereby distorting competition. Specifically, the association alleges that Temu mandates sellers to list products at no more than 85% of the price of similar items found on competing platforms., Furthermore, the marketplace reportedly reserves the right to intervene directly in pricing strategies, ultimately determining the final prices for sellers., These practices, if proven, would represent a significant departure from fair market competition principles, where sellers typically retain independent control over their pricing decisions. German and European competition law explicitly prohibits manufacturers and platforms from intervening in the price-setting process of independent distributors, aiming to ensure robust intra-brand competition.
Temu's Ascendance and Mounting European Scrutiny
Temu, known for its aggressive marketing and ultra-low prices, has experienced an explosive growth trajectory across Europe since its launch in 2023. Germany stands as its largest European market, boasting 19.3 million monthly active users, representing over a quarter of the adult population.,, Across the European Union, Temu recorded an average of 115.7 million monthly active users in the first half of 2025, a 12.5% increase from the latter half of 2024., This rapid expansion, while beneficial for consumers seeking bargains, has increasingly drawn the attention of European regulators.
The current antitrust probe is not an isolated incident. Temu has faced a growing wave of scrutiny across the continent concerning various aspects of its operations. In May 2024, Temu was designated a Very Large Online Platform (VLOP) under the European Union's Digital Services Act (DSA), a classification that imposes stringent obligations on major digital services to ensure consumer protection and transparency., This designation followed the company's disclosure of having over 45 million monthly active users in the EU.
Subsequently, in October 2024, the European Commission opened formal proceedings against Temu under the DSA, investigating concerns related to the sale of illegal products, the platform's potentially addictive design (including game-like reward programs), its recommendation systems, and data access for researchers., A preliminary finding by the Commission in July 2025 indicated that Temu might be in breach of its DSA obligations regarding the assessment of risks for illegal products, citing a "high risk for consumers in the EU to encounter illegal products on the platform.", These ongoing investigations highlight a concerted effort by European authorities to ensure that large online marketplaces comply with regional laws on competition, consumer protection, and digital safety.
The Broader Economic Impact of Price-Fixing on Market Dynamics
Price-fixing, or any practice that curtails a seller's freedom to set prices, carries significant economic implications. When competition is restricted, consumers often bear the brunt, facing higher prices and fewer choices., Research suggests that price-fixing can inflate prices by 20% or more, impacting household budgets and hindering consumers' ability to make informed purchasing decisions due to a lack of pricing transparency.
Moreover, such practices can stifle innovation and quality improvements, as businesses lack the incentive to compete on these fronts if pricing is controlled., For small and medium-sized businesses operating on platforms like Temu, the alleged imposition of pricing conditions could create an uneven playing field. If larger entities or platforms dictate pricing, smaller merchants may struggle to compete effectively, potentially leading to reduced sales, limited growth, and even market exit. This distortion undermines the natural dynamics of supply and demand, which are crucial for a healthy and competitive market ecosystem.,
Temu's Stance and the Path Forward
In response to the accusations, Temu has stated its commitment to adhering to applicable laws and regulations in all markets where it operates. The company has expressed confidence that any concerns raised can be successfully resolved., This stance reflects a common approach by large platforms facing regulatory challenges, often emphasizing compliance and cooperation.
The Bundeskartellamt's investigation is a critical step in determining whether Temu's operational model in Germany violates national and European competition laws. The outcome of this probe could lead to significant penalties, including substantial fines based on the company's turnover, and could necessitate fundamental changes to Temu's business practices within the EU. Furthermore, it underscores the increasing resolve of European regulators to enforce fair competition and consumer protection in the rapidly evolving landscape of digital commerce. The investigation into Temu, combined with the ongoing DSA probes, paints a clear picture: the era of unchecked growth for large online platforms in Europe is being met with robust regulatory oversight.
The coming months will reveal the findings of the Bundeskartellamt and other European bodies, shaping not only Temu's future operations but also setting precedents for how other global e-commerce players must conduct business within the stringent regulatory framework of the European Union. The ultimate goal remains to safeguard competitive markets, protect consumer interests, and ensure a level playing field for all participants in the digital economy.
