Arkansas AG sues Temu over alleged ‘deceptive tactics’ harming consumers: 'Data theft business'
The Chinese company is run by PDD Holdings, described as a 'monster in Chinese e-commerce'
Arkansas Attorney General Tim Griffin is taking legal action against the Chinese fast fashion retailer Temu over what he alleges are the company’s "deceptive tactics" that are harming consumers.
In announcing the lawsuit Tuesday, Griffin said Temu was "not simply an online marketplace [but] a data theft business that uses the online marketplace as a means to an end."
Griffin’s lawsuit targets Temu’s parent company, "PDD Holdings." Shaun Rein, founder of the China Market Research Group, has described PDD holdings as a "monster in Chinese e-commerce."
Griffin alleged that the company is using spyware and malware on its app to get more than just Americans’ consumer data.
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A mobile phone over a keyboard is seen with the logo of Temu on its screen. (Nikos Pekiaridis/NurPhoto via Getty Images / Getty Images)
"The average American thinks that they’re looking at a shopping app like any other shopping app. But Temu is not only taking your data that relates to the sales, they are taking all sorts of data," Griffin said.
According to Griffin, the app includes a code, written to avoid detection and evade security review.
"You may have seen these unbelievably low prices and you might be thinking, ‘how can they sell that so low?’ Because it’s not their business. Their business is the data, as I indicated, the selling of the product, the marketplace, is a means to an end."
A mobile phone displays the Temu App interface in Shenzhen, Guangdong Province, China, Oct 28, 2022. (CFOTO/Future Publishing via Getty Images / Getty Images)
Griffin noted that the company is run by former members of the Chinese Communist Party (CCP).
A spokesperson for Temu said the company was "surprised and disappointed" by the lawsuit. The company accused the attorney general of filing the lawsuit "without any independent fact-finding."
"The allegations in the lawsuit are based on misinformation circulated online, primarily from a short-seller, and are totally unfounded. We categorically deny the allegations and will vigorously defend ourselves," the Temu spokesperson said.
The Temy spokesperson argued that the scrutiny, "will ultimately benefit our development."
Temu Super Bowl ads earlier this year drew the ire of lawmakers over the company’s links to products made with the use of forced labor in Xinjiang as well as its data-sharing policies.
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Temu’s Super Bowl ads cost roughly $7 million each — which was the going rate for 30-second ads during this year’s big game — and come as part of a $3 billion marketing push this year as the company looks to claw market share away from companies like Amazon. The company also ran a Super Bowl ad last year as it looked to gain market share among U.S. consumers.