Temu settles Texas data privacy and product safety lawsuit

Temu has reached a settlement with the state of Texas to resolve a lawsuit concerning user data privacy and consumer protection. As part of the agreement, the e-commerce platform will pay $3 million to the state.

The settlement addresses allegations that Temu and its parent company, PDD Holdings, unlawfully harvested user data that could potentially be accessed by the Chinese government. Under the new terms, Temu must store personal data of Texas users on servers located within the United States that are owned or controlled by American companies. The agreement also restricts access to this data by Chinese individuals or entities, with exceptions only for necessary commercial transactions like shipping.

Beyond data privacy, the settlement mandates rigorous new product safety standards. Temu must undergo annual independent safety testing to identify products containing dangerous chemicals or materials, specifically targeting items such as clothing and children’s products. If hazardous items are found, the company must remove them, terminate the associated sellers, and issue full refunds to affected consumers.

Failure to comply with the data security provisions could result in penalties of up to $8 million for each year a violation occurs. While Temu did not admit to wrongdoing, the company stated it agreed to the settlement to resolve the matter and continue serving consumers.