Iowa’s Attorney General has sued the owner of Temu, alleging deceptive data collection, routing of user information to China and consumer fraud.
Attorney General Brenna Bird filed the petition in Polk County District Court in the US under the Iowa Consumer Fraud Act against PDD Holdings, formerly Pinduoduo, and Whaleco.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
WhaleCo is the corporate entity that operates and does business as Temu.
Brenna said: “Temu says they are a way to ‘shop like a billionaire’ and get great value for little money, but the goods are substandard and not as advertised.
“Worse than that, they can siphon Iowans’ information to the Chinese Government. Temu is violating Iowa’s Consumer Fraud Act, and we are holding them responsible.”
According to the petition, forensic investigators retained by the state reviewed Temu’s app code and found that it gathers users’ precise location data, lists of other installed applications, Wi-Fi network details and device identifiers without adequate disclosure or consent.
The filing alleges the app is built to avoid detection by security researchers, including through code that can reconfigure itself after installation.
It also alleges the app includes code from Pinduoduo’s China-based platform, which Google suspended from its Play Store in 2023 after malware was discovered on it.
The petition further alleges that Temu collected personal data from minors, including children under 13, while its terms of service state that those users are barred from the platform.
On business practices, the filing alleges false reference pricing and failure to honour terms tied to referral and gamification schemes.
It also alleges the sale of counterfeit merchandise carrying trademarks belonging to Iowa institutions, including the University of Iowa, and misrepresentation of the scale of its charitable tree-planting contributions relative to revenue.
The petition also refers to a US congressional committee report alleging Temu does not have systems to ensure compliance with the Uyghur Forced Labor Prevention Act.
The state is seeking a declaration that the alleged conduct breaches the Consumer Fraud Act, injunctive relief, civil penalties of up to $40,000 per violation, consumer reimbursement, disgorgement of funds, and recovery of costs and fees.
The petition alleges that PDD Holdings directs Temu’s operations and shares overlapping executive officers, and it seeks to hold both companies jointly and severally liable.
In May, the European Commission imposed a €200m ($233m) penalty on Temu under the Digital Services Act, concluding that the retailer did not properly evaluate the risks linked to illegal products sold through its platform.
