Arkansas attorney general sues Chinese-owned Temu for deceptive practices

Arkansas Attorney General Tim Griffin announces a lawsuit against Temu, an online shopping platform with Chinese ownership, on June 25, 2024. (Screenshot from livestream)

Temu, an online shopping platform with Chinese ownership, is the subject of the latest lawsuit from Arkansas Attorney General Tim Griffin.

Griffin filed the lawsuit on Tuesday in the Circuit Court of Cleburne County under the Arkansas Deceptive Trade Practices Act, the Personal Information Protection Act and for “unjust enrichment.”

The lawsuit seeks preliminary and permanent injunctions to prevent Temu’s parent company, PDD Holdings, from acquiring, maintaining and utilizing information from Arkansas residents. It also demands a trial by jury and requests the state receive $10,000 per violation of the Arkansas Deceptive Trade Practices Act.

“We are the first state to take this kind of action,” Griffin said at a press conference. “I anticipate, I predict, there will be many, many more.”

When asked about the decision to not file a multi-state lawsuit against Temu, Griffin said he “wasn’t interested in waiting on others.”

Temu launched in 2022 and sells discounted products to buyers worldwide. Products range from clothing and automobile accessories to kitchen appliances, furniture and more. Several products are listed for less than $1, and prices also reach $1,000. The phone app has several million downloads, and the site can also be accessed on a computer.

Griffin said Tuesday that Temu has targeted young people, such as with its animated Super Bowl commercial .

The 51-page complaint alleges that Temu’s app is “purposefully designed to gain unrestricted access to a user’s phone operating system” including the camera, location, contacts, texts and other apps. It also claims that users without the app on their phone are at risk if any of their information is on the phone of a Temu user.

When using Temu, Griffin said, a user is not only opening up their consumer and purchasing behavior, but their whole lives.

“You may have seen … these unbelievably low prices, and you may be thinking, ‘How can they sell that so low?’” Griffin asked. “Because it’s not their business. Their business is the data.”

The alleged monetization of collecting data and selling it to third parties is “at the direct expense of Arkansans’ privacy rights,” according to the lawsuit.

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“I have a responsibility to ensure that Arkansans’ data is protected, and that’s what this is about,” Griffin said.

The lawsuit includes screenshots of Arkansas-related products sold on Temu, claiming that PDD Holdings has “purposefully availed themselves of the privilege of doing business in the State of Arkansas.” Products include state flag lapel pins, Razorback merchandise and keepsakes related to the April 8 total solar eclipse , which passed through Arkansas.

Griffin also cites the poor quality of products customers receive from Temu as part of its deceptive practices. Goods often are of low quality, contrary to the company’s marketing, and sometimes items received do not resemble online photos, according to the lawsuit.

Furthermore, the “discounted price” of Temu’s products are deceptive through false-reference pricing, Griffin writes. The lawsuit also alleges that the site includes fake reviews to attract and maintain users.

Griffin spoke Tuesday about what he said was a general increase of awareness of practices from China.

“People who have been following China’s rise over the last few decades, have known for a long, long time that they’re not just a competitor economically, they’re up to no good militarily, they’re up to no good in terms of a hegemon in the east,” Griffin said. “There are a number of ways they’re doing this, and data is part of that.”

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