Iowa accuses Temu of collecting private consumer data

DES MOINES, Iowa (CN) — Iowa sued Temu and its Chinese parent company on Wednesday, claiming the online retailer violates Iowans privacy rights and exposes them to spying by the Chinese government.

“Temu advertises itself as an e-commerce platform offering low-cost goods to consumers, even telling Iowans they can ‘shop like a billionaire,’” Iowa Attorney General Brenna Bird said in a statement issued Wednesday. “But the promise of savings lures Iowans to the platform where Temu deceptively harvests Iowans’ data that could be accessed by the Chinese Communist Party.”

In the 86-page complaint, Iowa accuses PDD Holdings, Inc. and Whaleco Inc. — which does business as Temu — of violating the Iowa Consumer Fraud Act. The state also claims Temu makes false representations about the quality and pricing of goods it sells to consumers.

PDD Holdings was formerly known as Pinduoduo, with headquarters in Shanghai, China. In February 2023, PDD Holdings moved its principal executive offices from Shanghai, China, to Dublin, Ireland. The state says PDD Holdings continues to have significant operations in China, with multiple subsidiaries located within the country.

In the complaint filed in Polk County District Court, the state says Temu, through its online shopping app, “harvests data from Iowans and provides a pathway for that harvested data to flow to China. It does that while committing numerous consumer frauds such as false representations about the quality of goods, sign-up scams, pricing misrepresentations, and many more.”

The state says Temu collects users’ sensitive, personally-identifiable information without their knowledge or consent. Temu’s app is purposely designed to evade detection, the state claims, “even going so far as being able to reconfigure itself and its properties on an individual’s phone without anyone’s knowledge” other than the defendants.

The Pinduoduo app has been called malware by security experts, Iowa claims, and Google suspended the Pinduoduo app from the Google Play Store after discovering malware issues on the app. Though the defendants made changes to the Pinduoduo app in response to the suspension, “they continued to violate users’ privacy rights,” Iowa maintains.

Temu makes “demonstrably false representations” with regard to its privacy-invasive conduct, the state says, adding that, Temu “deceives Iowans about the quality of the products offered on its platform, flooding the United States and Iowa markets with substandard products,” which violates Iowa’s Consumer Fraud Act.

“Temu customers in Iowa have submitted dozens of complaints to the [Iowa Better Business Bureau] and Iowa Attorney General about Temu over the past three years,” the state says in its complaint. “Multiple Iowa consumers complained to the Better Business Bureau that even after returning goods to Temu, they never received a refund. And many others complained of receiving goods they never ordered, some of which they were charged for and unable to receive refunds for.”

PDD Holdings did not immediately respond to a request for comment Wednesday.

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