The US state of Arkansas has initiated legal action against Chinese e-commerce giant Temu, owned by PPD Holdings, for alleged violations of the state’s consumer privacy laws.
On 25 June 2024, Arkansas Attorney General Tim Griffin filed a lawsuit in the Cleburne County Circuit Court, accusing Temu of collecting extensive user data, such as location and biometric information.
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Griffin alleges that this can lead to exploitation and theft of consumers’ private data.
The lawsuit accuses Temu’s operations of contravening the Arkansas Deceptive Trade Practices Act (ADTPA) and the Arkansas Personal Information Protection Act (PIPA).
Griffin described the amount of user data collected as “shocking” and likened the app to “functionally malware and spyware”, designed to gain unrestricted access to users’ phone operating systems.
The 51-page complaint demands preliminary and permanent injunctions against PDD Holdings to halt the acquisition, maintenance and use of information from Arkansas residents.
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By GlobalDataIt also calls for a jury trial and seeks $10,000 per violation of the ADTPA.
The state is seeking an injunction on Temu’s alleged deceptive trade practices and privacy violations, the imposition of civil penalties, and the securing all other monetary and equitable relief deemed appropriate.
Griffin said: “Temu is not an online marketplace like Amazon or Walmart. 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 parent companies of Temu — PDD Holdings and WhaleCo — for violating 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 monetises this unauthorised collection of data.”
Temu, which offers low-cost goods manufactured in China, was launched in the US in 2022.
PDD Holdings, a Nasdaq-listed Chinese company, operates both Temu and its precursor, the Pinduoduo online shopping platform.
In May 2024, the European Consumer Organisation BEUC sued Temu for breaching the European Union’s online content rules.
