The temperature is rising for Temu, too.
On Tuesday, Arizona Attorney General Kris Mayes filed a lawsuit against the Chinese-founded e-tail marketplace after accusing it of using hard-to-beat prices to lure in consumers before harvesting their data without their knowledge or consent.
“We allege that Temu has repeatedly and willfully violated the Arizona Consumer Fraud Act and put the privacy of Arizonans, including minors, at extreme risk,” she said. “Arizonans should be aware that behind Temu’s low prices and shiny advertising, there is real danger. The Temu app can infect users’ devices with malware to steal their private data while carefully hiding its tracks.”
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The complaint, which follows similar grievances filed by Arkansas, Nebraska and Kentucky in recent months, alleges that the PDD Holdings subsidiary collects an “alarming amount” of sensitive user data and personally identifiable information “far beyond” what is necessary for a typical online shopping app. It says that the platform “secretly infiltrates” users’ devices to access and cull sensitive information, including the user’s precise physical location, activity on the phone’s microphone and camera, and activity on other apps installed alongside it.
Mayes said that the privacy risks are exacerbated by the fact that Temu is owned by a Chinese company and subject to Chinese laws, including those that could require it to hand over information to the Chinese government for national security or intelligence purposes. Its code, she added, is also designed to evade forensic inspection through multiple layers of encryption.
The Copper State’s top cop also charged the Shein rival with engaging in “deceptive and unfair” trade practices, including faking customer reviews; advertising products that look nothing like the ones that arrive on the buyer’s doorstep; using the customer’s payment information to order additional, unauthorized items; charging for undelivered goods; stealing the intellectual property of Arizona brands such as the Arizona Cardinals and Fender Guitars; and using forced labor in “clear violation” of U.S. trade policies.
The last harkens to a 2023 report by the House Select Committee on the Chinese Communist Party that said it was “all but guaranteed” that forced labor products from Temu are entering the United States on a “regular basis,” largely because the Boston-headquartered company is doing “next to nothing” to keep its supply chains free of forced labor.
“I will not stand by while a Chinese company vacuums up reams of sensitive data from Arizonans’ phones and profits from deception and abuse,” Mayes said. “We are taking Temu to court to stop these practices, protect Arizonans’ privacy and hold Temu fully accountable under Arizona law.”
Temu said that it denies the allegations in the lawsuit and will defend itself vigorously against them.
“We help consumers and families access quality products at affordable prices,” a spokesperson said. We work to keep costs down and maintain a reliable supply so people can meet their needs without stretching their budgets. We also create growth opportunities for businesses by offering a low-cost alternative to traditional gatekeepers.”
Arizona’s bid to reign in Temu—as well as impose civil penalties and other forms of restitution—comes on the heels of a letter from Senator Tom Cotton, a Republican from Arkansas, to Attorney General Pam Bondi urging her to direct the Departments of Justice and Homeland Security to investigate both Temu and Shein for engaging in what he claimed is “industrial-scale” intellectual property theft and counterfeiting that is “devastating American designers, brands and innovators.”
Cotton cited an Information Technology and Innovation Foundation study in August that found that nearly half of the products that the nonprofit purchased from “suspicious listings” on Shein, Temu and AliExpress, including cosmetics, toys, luxury goods, pharmaceuticals and household items, were likely counterfeit. He noted that Temu appeared to host “particularly sophisticated and deceptive fakes.”
“I urge you to prioritize Shein and Temu facilities for immediate inspection, seizures and criminal investigations,” he wrote in the letter, which was dated Dec. 1. “The Department of Justice can no longer allow the continued theft of American property on our soil.”
That Shein and Temu are often referred to in the same breath—or wryly portmanteau-ized, as in “Saturday Night Live’s” 2024 “Xiemu” skit—is likely a source of frustration for the two similar platforms that have considered themselves, at various times, “at war” with internecine accusations of anticompetitive behavior and copyright infringement. Shein has mockingly called Temu a “fraudulent” marketplace, while Temu has denounced Shein’s “illegal scheme” to “thwart” its success as a “fraud and a farce.”
Shein has plenty else to sweat about on its own, as well: The outrage in France over the sale of banned weapons and so-called “childlike” sex dolls on its platform doesn’t appear to be dying down. Despite taking down the listings last month, the Singapore-headquartered firm could be looking at a three-month suspension if the French government succeeds in its appeal. Shein is also facing a 3 billion-euro ($3.5 billion) lawsuit from a coalition of thousands of French retailers that has accused the company of poaching customers through “misleading commercial practices” and “breaches of product conformity and safety obligations.”
Compounding its pressures, Texas Attorney General Ken Paxton opened on Monday an investigation into the Chinese-founded e-commerce leviathan for possible violations of state rules relating to unethical labor practices and the sale of unsafe consumer products.
“Safe, non-toxic material and products are another key ingredient to the Make America Healthy Again movement. Any company that cuts corners on labor standards or product safety, especially those operating in foreign nations like China, will be held accountable,” he said. “Texans deserve to know that the companies they buy from are ethical, safe, transparent, and not exploiting workers or selling harmful products. I will not allow cheap, dangerous, foreign goods to flood America and jeopardize our health.”
Shein said that it takes concerns such as Paxton’s seriously, is “fully committed to cooperating” and welcomes “constructive engagement” with the attorney general.
“Our mission—to provide affordable, fashionable products to customers around the world—is underpinned by a dedication to safety, compliance, and respect for human rights,” a spokesperson said. “We strive to operate responsibly across every area of our business, implementing policies designed to protect both our shoppers and those we work with.”
