On June 25th, Arkansas filed a lawsuit against the American online shopping app Temu, accusing the Chinese-owned platform of violating the state’s privacy laws, engaging in deceptive trade practices, and using low-priced products to obtain customer’s personal information “almost endlessly”.
The lawsuit alleges that Temu violated the Arkansas Deceptive Trade Practices Act and the Arkansas Personal Information Protection Act.
According to the complaint, Temu used cheap products made in China to lure users into unknowingly providing “almost unlimited access to their personal identifying information”.
The lawsuit also claims that Temu is “purposefully designed” to have unrestricted access to a user’s mobile operating system, including the camera, location, contacts, messages, files, and other applications. Its design is intended to make this extensive access go unnoticed, even by savvy users. “Once installed, Temu can recompile itself and alter attributes, including overriding a user’s perceived data privacy settings.”
The complaint points out that Temu “profits by selling unauthorized data to third parties, directly at the expense of the privacy rights of Arkansas residents”.
Arkansas Attorney General Tim Griffin filed the lawsuit in Cleburne County Circuit Court listing Temu’s parent company PDD Holdings Inc. and PDD’s subsidiary WhaleCo Inc. as defendants.
A spokesperson for Temu told the Epoch Times in an email that the allegations in the lawsuit are “based on misinformation circulating on the internet, primarily from a short-seller, and are completely unfounded.”
The spokesperson stated, “We strongly deny these allegations and will vigorously defend ourselves.”
The lawsuit states that Temu’s product discounts are deceptive through false reference pricing and the company uses “fraudulent means” to attract and retain users, paying individuals to provide reviews that are made “more positive”.
The plaintiffs are seeking civil penalties against Temu, including a $10,000 fine for each violation of the Arkansas Deceptive Trade Practices Act, and demanding that Temu provide “all other money and equitable relief to which the state is entitled.”
In 2022, Temu shopping app was launched in the United States, primarily selling heavily discounted goods, and has become one of the largest downloaded apps in the country. The company has faced criticism due to security and privacy concerns.
Griffin announced the lawsuit on Tuesday, stating that Temu, “led by a group of former Chinese Communist Party officials, has brought significant security risks to our nation and citizens.”
He added, “While this marks the first state government lawsuit against Temu for deceptive trade practices, it is not the first time Temu’s practices have been questioned.”
The lawsuit mentions that Temu’s business platform was temporarily suspended from the Apple App Store in 2023 for allegedly making “false representations” about the types of user data it could access or collect, including how this data was collected and used.
Last year-end, Apple stated that Temu was later reinstated and became the most downloaded free app in the Apple App Store by the end of the year.
In March 2023, Google discovered malicious software in Temu’s sister app – the Chinese version of PDD – and subsequently removed it from the Google Play Store.
This removal prompted multiple investigations into the company, including an ongoing investigation led by congressional members.
On April 15th, federal senators Tom Cotton and Marco Rubio wrote to President Biden requesting information about Temu’s relationship with the Chinese Communist Party.