Another state’s attorney general has turned on Temu.
Kentucky Attorney General Russell Coleman filed a lawsuit setting forth a host of claims against the China-founded e-commerce company Thursday. The state alleges that Temu illegally captures unnecessary consumer data, allows that data to be shared with Chinese government officials, uses greenwashing tactics to convince consumers to purchase, relies on forced labor, violates intellectual property laws on Kentucky-based brands and more.
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Coleman states that his office conducted an investigation into the Temu app’s inner workings and mechanisms for collecting consumer data, which “revealed that the Temu app is designed to collect sensitive user data without the user’s knowledge or consent and is purposely designed so that it can evade detection of this type of data collection by third-party security researchers.”
He went on to say that the company “collects an alarming amount of sensitive user data (PII) that is well beyond what would be necessary in the ordinary course of business for an online shopping app.” The state believes that practice to be doubly concerning because Temu’s parent company is a Chinese entity.
“These privacy and security risks are compounded by the fact that Temu is owned by a Chinese company (PDD Holdings, Inc.), which itself is subject to Chinese law, including laws that mandate secret cooperation with China’s intelligence apparatus, to the exclusion of any data protection guarantees existing in the United States,” Coleman said in the complaint.
Beyond the myriad data security and consumer privacy concerns expressed in the complaint, Coleman also alleges that Temu uses forced labor to make goods it sells to Kentucky consumers. In the complaint, that claim is propped up by a report from the Los Angeles Times and Congressional reports that state that Temu lacks measures to prevent products made in China’s Xinjiang Uyghur Autonomous Region (XUAR) from reaching U.S. customers.
Coleman later alleges that, in addition to its other purported infractions, Temu violates the intellectual property rights of Kentucky businesses
“The Temu app is awash in products that baldly infringe upon, or simply copy outright, intellectual property owned by U.S.- based businesses large and small,” Coleman writes. “As of the date of this filing, Temu features dozens of what appear to be unlicensed products claiming to be from Kentucky brands like the University of Kentucky, University of Louisville, Buffalo Trace Distillery and Churchill Downs.”
Coleman’s crusade against Temu is the latest in a string of government lawsuits against the company, which is headquartered in Boston but was founded in China. Last year, Arkansas Attorney General Tim Griffin filed a lawsuit against the company over data privacy concerns, and last month, Nebraska Attorney General Mike Hilgers filed a separate complaint alleging some of the same wrongdoings Coleman pinpoints in his newly filed lawsuit.
What’s more, the attorneys general of 21 states banded together last summer to pen a letter to Qin Sun, Temu’s president, and Chen Lei, CEO of PDD Holdings, Temu’s parent company, demanding answers to questions about Temu’s business practices. Federal lawmakers have shown similar scrutiny toward the low-cost e-commerce player.
Coleman said the company’s practices actively put Kentucky shoppers in danger and threatens the success of state businesses.
“Temu’s cheap products and flashy marketing hide real danger. Their platform can infect Kentuckians’ devices with malware, steal their personal data and send it directly to the Chinese government,” Coleman said in a statement. “At the same time, they’re eroding trust in some of Kentucky’s most iconic brands, which could lead to job losses and hardship. Kentuckians need a strong defense against this aggression, and that’s exactly what the Attorney General’s Office intends to do.”
The state claims that Temu violated the Kentucky Consumer Protection Act (KCPA) and seeks a preliminary and permanent injunction “preventing Temu from acquiring, maintaining and otherwise utilizing the PII of Kentucky citizens,” as well as putting a stop to intellectual property infringement. It has also requested a $2,000 penalty be issued to Temu for each individual violation of the KCPA.
A Temu spokesperson denied the allegations in the complaint and said the company plans to “defend [itself] vigorously.”
“We understand that as a new company with an innovative supply chain model—one that begins by bringing the global supply chain directly to the end consumer—some may misunderstand us at first glance and not welcome us,” the spokesperson told Sourcing Journal via email. “We are here for the long term and are eagerly listening and improving. We believe that scrutiny will ultimately benefit our development. We are confident that our actions and contributions to the community will speak for themselves over time.”
