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State of Arkansas sues Chinese e-commerce company Temu for alleged data theft

Arkansas AG calls Temu "a data-theft business that sells goods online as a means to an end."
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Posted at 9:48 AM, Jun 27, 2024

Arkansas Attorney General Tim Griffin recently announced he has filed a lawsuit against e-commerce site Temu for allegedly violating the state's Deceptive Trade Practices Act, as well as its Personal Information Protection Act. The lawsuits were filed in Cleburne County Circuit Court in Arkansas.

The lawsuit calls for an end to Temu's "deceptive trade practices and violations of users’ privacy, imposing civil penalties, and providing all other monetary and equitable relief."

The suit cites reports that Temu asks for permission from users to gain personal information and then sells that information. Griffin said the practice means it is "a data-theft business that sells goods online as a means to an end."

Temu has quickly become one of the United States' most used e-commerce sites. It has garnered mainstream appeal as it has been widely marketed for discounted goods. In its quarterly investor filing, Temu's parent company PDD Holdings boasted it had a 131% increase in revenue from January-March 2024 compared to the first three months of 2023.

Related story: Is Temu safe? Lawsuit claims app hacks 'literally everything'

“Temu is not an online marketplace like Amazon or Walmart," Griffin alleges. "It is a data-theft business that sells goods online as a means to an end. Today I have filed a first-of-its-kind state lawsuit against the parent companies of Temu—PDD Holdings Inc. and WhaleCo Inc.—for violating the ADTPA and PIPA. Though it is known as an e-commerce platform, Temu is functionally malware and spyware. It is purposefully designed to gain unrestricted access to a user’s phone operating system. It can override data privacy settings on users’ devices, and it monetizes this unauthorized collection of data."

Temu said it cares "deeply about privacy." It also says it doesn't "sell" personal information in the traditional sense, and only provides it to certain entities to create a better and more personalized service for users.

Temu later reacted to the announcement.

"We are surprised and disappointed by the Arkansas Attorney General's Office for filing the lawsuit without any independent fact-finding," a Temu spokesperson said. "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."