Attorneys general from 21 states have raised concerns about Chinese budget online retailer Temu, questioning its efforts to protect consumers from data privacy misuse and products made with forced labor. Montana Attorney General Austin Knudsen expressed his worries about Temu’s business practices and alleged ties to the Chinese Communist Party. He emphasized his responsibility to safeguard Montanans’ sensitive consumer data and hold accountable those who violate consumer protection laws.
Led by Knudsen, the group of attorneys general sent a letter to Qin Sun, Temu’s president, and Chen Lei, CEO of PDD Holdings, Temu’s China-based parent company. The attorneys general cited a report published by the House Select Committee on the Chinese Communist Party (CCP) in June last year as a basis for their concerns. According to the report, Temu admitted that it lacks a policy prohibiting the sale of goods from Xinjiang on its platform.
The report also highlighted that Temu conducts no audits or compliance system to ensure adherence to the Uyghur Forced Labor Prevention Act (UFLPA). This federal law prohibits importing goods from China’s Xinjiang region unless companies can provide verifiable proof that forced labor was not involved in their production.
The article further explains that over 1 million Uyghurs have been detained in internment camps in Xinjiang under China’s pretext of combating extremism. These detainees are subjected to forced labor, torture, political indoctrination, forced abortion, and other forms of mistreatment. Both the Biden and Trump administrations have recognized these repressive policies as genocide.
In January this year, research firm Marketplace Pulse estimated that over 100,000 China-based sellers were operating on the Temu shopping platform.
Concerns were also raised regarding user data collected by Temu. The attorneys general expressed worries about CCP control over companies like Temu and their potential obligation to collect and send consumer data upon demand. They referred specifically to Montana’s Consumer Data Privacy Act set to take effect on October 1st this year.
The article mentions other Chinese-owned companies drawing scrutiny for consumer data security issues such as TikTok and Shein due to Chinese authorities’ ability under various laws to compel local firms into sharing data.
A blog post published by the Center for Internet Security warned about how Chinese laws authorize harvesting data from commercial entities like TikTok, Temu, and Shein. The post emphasized considering CCP’s objectives regarding data control when assessing all Chinese-owned apps including TikTok, Temu, and Shein. Montana became first US state banning TikTok completely after Governor Greg Gianforte signed Senate Bill 419 into law in May 2023. In June Arkansas filed lawsuit against temo accusing it violating state privacy laws engaging deceptive trade practices.
The attorneys general posed several questions for which they requested responses within thirty days. They asked whether former CCP members on PDD Holdings’ executive leadership team had access any US consumer data possessed or acquired by temo. They also sought information regarding types of collected US consumers’data,data storage locations, requesting if CCP officials required or requested temo or PDD holdings turn over any US Data, and how temo notifies consumers about product recalls related safety concerns.Another question asked how temo assures consumers products sold do not involve slave labor.
Michael Lucci, the founder of nonprofit State Armor commended state attorneys generals’ efforts,stating “Temus too-good-to-be-true deals are made possible by supply chains built with slave labor along with deep connections with chinese communist party. In exchange for heavily discounted cheaply made items,Temu gains full access your phone ability harvest personal date American Consumers”. He likened Tiktok is trendy app allowing ccp infiltrate us exert control supply chains gain access americans private information develop long term tools economic coercion.