Texas AG Paxton Secures Privacy Settlement With Temu

Texas Attorney General Ken Paxton on Oct. 16 announced a settlement with Chinese online retailer Temu over consumer data protection and sales of products containing toxic substances.

Paxton sued Temu in February for allegedly secretly harvesting personal data of Texans.

“Temu utilizes dangerous software functions that are completely inappropriate for a simple e-commerce retailer. These functions expose the Temu app for what it is—a Trojan horse that allows the app to bypass security protocols and create a backdoor into users’ private data,” Paxton’s office said in a statement at the time.

Although Temu’s stated headquarters is in Boston, the company is a Chinese brand, and data collected from customers are at risk of being exposed to the Chinese Communist Party (CCP), according to Paxton’s office.

Under the settlement, Temu has been mandated to store the personal data of Texans on U.S.-owned and controlled servers located in the United States, while strictly preventing access by Chinese entities.

Temu has also agreed to conduct annual independent testing of products to detect items containing dangerous chemicals and materials.

The settlement requires the company to remove the toxic products, terminate such sellers and their affiliated stores from the platform, notify Texas customers, and provide a full refund for the products.

“This is a historic victory for data privacy, consumer protection, and Texans who deserve to know that the products they purchase are safe,” Paxton said.

Similar lawsuits against Temu have been filed in Arkansas, Nebraska, Kentucky, Arizona, Texas, and Oklahoma.

Missouri Attorney General Catherine Hanaway said in a statement, accompanying her lawsuit against Temu, that the company allegedly engaged in “aggressive and misleading data collection practices” that could leave the personal data of American citizens at the mercy of the CCP.

“My advice to all Missourians is to delete this app. Temu lied to you, stole your data, packaged it up, and potentially delivered it to the CCP,” Hanaway said in the Oct. 13 statement.

Temu, which did ​not admit wrongdoing in the Texas settlement, said the company “has come to ​an agreement ⁠to resolve this matter” as it continues to “focus on serving consumers and supporting businesses across Texas,” according to Reuters.

The Epoch Times reached out to Temu for comment and did not receive a response.

If Temu fails to comply with the data security provisions, a penalty of $8 million will be charged for every year a violation occurs, Paxton’s office said. The company also agreed to pay $3 million in civil penalties to Texas.

The lawsuit was filed against Whaleco Inc., which is doing business as Temu, and PDD Holdings Inc., which owns Temu.

PDD Holdings was founded in China and later relocated its principal executive offices to Ireland, but it “continues to maintain significant operations in China,” Paxton’s office said in the February statement.

Temu had more than 82 million active users in the United States in 2023.

According to Temu’s privacy policy, in addition to information submitted by users during registration or when using services, the company also collects data when users interact with its services, including browsing history and information collected through tracking technologies.

Temu said it shares personal information with certain third-party services to perform functions on its behalf, such as delivering packages and providing customer service. The company also shares personal information to comply with legal requirements.

Temu has faced international scrutiny on dangerous products sold on its platform.

A 2024 report from the South Korean government revealed unacceptable levels of toxic chemicals, such as cadmium and lead, in clothing sold on Temu.

At the time, a Temu spokesperson said that the associated products had been removed from the platform before South Korea issued the report.

Reuters contributed to this report.