Launched in 2022, online discount shopping website Temu — owned by the China-based company PDD Holdings — has come under renewed scrutiny following its large Super Bowl ad buy this past weekend.
In recent months, Temu has found itself at the center of a Congressional investigation, as well as the subject of two separate class action lawsuits out of New York and Illinois.
Accusations against the company include the use of forced labor, spying on its customers, improper handling of users’ financial information, and alleged ties to the Chinese communist party.
Ahead of the Super Bowl, a group of federal Republican lawmakers called on CBS — the network responsible for carrying this year’s game — to not air Temu’s ads.
Among those who asked the network to refrain from airing Temu’s ads were: Rep. Carol Miller (R-WV), Rep. Byron Donalds (R-FL), Rep. Jim Banks, (R-IN), Rep. Nicole Malliotakis (R-NY), Rep. Christopher Smith (R-NJ), Rep. Pete Stauber (R-MN), Rep. Ronny Jackson (R-TX), Rep. Michelle Steel (R-CA), Rep. Beth Van Duyne (R-TX), Rep. James Baird (R-IN), and Rep. Mike Carey (R-OH).
Each ad that aired during the game cost the company an estimated $7 million, the going rate for a thirty-second Super Bowl ad this year.
Despite the controversy surrounding the online retailer, Temu was the most downloaded app in the United States at the end of 2023 with more than 51 million active monthly users.
The lawsuit filed against Temu in Illinois alleges that the company’s app “‘bypasses’ phone security systems to read a user’s private messages, make changes to the phone’s settings and track notifications.’”
According to the lawsuit, the company collects information using “deceptive” and “unscrupulous” practices, alleging that the “app is purposefully and intentionally loaded with tools to execute virulent and dangerous malware and spyware activities on user devices.”
The New York lawsuit accuses the company of allowing users’ “financial information to be compromised,” resulting in credit card and bank account information being leaked or sold.
“[Temu] grossly failed to comply with security standards and allowed its customers’ financial information to be compromised, all in an effort to save money by cutting corners on security measures that could have prevented or mitigated the Breach,” the lawsuit said.
Temu responded to these allegations in a statement to CBS Chicago.
“We categorically deny the allegations and intend to vigorously defend ourselves against these meritless lawsuits,” the company said. “The complaints parrot a report put out by a short-seller, which has an obvious incentive to try to drive down Temu’s stock price through misinformation. The report even includes a disclaimer that its contents are ‘not statements of fact.'”
“The truth is that safeguarding privacy is one of Temu’s core values. Our privacy practices are in line with industry standards and are transparently disclosed in our Privacy Policy,” the statement said. “Temu also has a ‘permissions’ section in the Temu app and website that clearly explains the device features that Temu does and does not access. We do not sell customer data to third parties.”
The Congressional investigation into Temu — as well as Shein, another controversial online retailer — produced a report released in June of last year that revealed that the company fails to maintain “even the façade of a meaningful compliance program” preventing products made with slave labor from being sold on their platform.
According to the report, Temu admitted that it “does not expressly prohibit” the sale of goods from regions known to utilize forced labor and “conducts no audits and reports no compliance system to affirmatively examine” whether United States forced labor laws are being observed.
The report did say, however, that Temu expressed it required suppliers to sign “boilerplate terms and conditions” prohibiting the use of slave labor.
The company has called these allegations “completely ungrounded.”
Temu isn’t the only controversial company linked to China that has been top of mind in recent days.
Also around the time of the Super Bowl, President Joe Biden (D) received criticism for his campaign’s decision to join TikTok, a social media platform owned by the Chinese company ByteDance.
The app has been subject to heightened scrutiny over data privacy concerns, as Chinese law requires the country’s businesses to share information with the government upon request.
[RELATED: Biden Campaign Joins TikTok Despite Persistent Security Concerns]
Despite this law, TikTok CEO Shou Zi Chew has denied ever having shared U.S. users’ data with the Chinese government, stating before Congress that the company has begun taking steps to ensure that American data continues to remain shielded from Chinese officials, citing what has become known as “Project Texas.”
Nonetheless, bans remain in place prohibiting TikTok from being downloaded or used on devices owned or issued by the federal government.
Many states — including Maine — have also instituted similar prohibitions in an effort to protect sensitive data from potentially being exposed to the Chinese government.
As of January 2023, 33 states — including Maine — had put in place some form of a ban on TikTok for government-issued devices.
They advertise on the Maine Wire too. lol.