Temu, Fighting Data Privacy Lawsuit, Sues 20 Cybersquatters
Temu is looking to protect what it describes as a $100-plus billion market cap—$10 billion more than rival Shein’s latest rumored valuation—since it blew up the American fast-fashion market little more than one year ago and dethroned Forever 21’s newest bedfellow as the nation’s most-downloaded shopping app.
The company filed a lawsuit on Oct. 30, targeting what it calls “cybersquatters”—companies creating websites, apps, coupon codes and other entities designed to look like Temu.
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The anti-cybersquatting, trademark infringement and unfair competition suit, filed in U.S. District Court for the Northern District of Illinois, claims that these bogus sites dupe consumers into believing they’re engaging with Temu. Several of these sites use Temu’s name in their URLs, including temuapp.biz. temu-app.net, temucouponcodes.com, temudeals.store and temucouponcodes.com.
According to the lawsuit, some of these consumers go so far as to place orders with the fake sites, only to not receive their items or experience poor customer service. Temu says it has received a multitude of online customer complaints, as well as those filed with the Better Business Bureau, from customers falsely believing they were buying from the Super Bowl advertiser linked to Xinjiang abuses.
Temu has not responded to a request for comment. But that isn’t the end of the juggernaut’s legal troubles.
Though Temu, whose name means “team up, price down,” recently settled its legal beef with Shein, the company has been hit with another lawsuit, this time over undisclosed data collection.
The complaint, also filed on Nov. 3 in the United States District Court for the Northern District of Illinois on behalf of seven named plaintiffs, alleges that Temu collected data without customer consent. The suit asserts that the collected data could be demanded by the Chinese government at any time.
The group of Temu shoppers from Illinois, California, Massachusetts and Virginia—Jehan Ziboukh, Margret Philie, Vera Figlock, Nicole May, Tyana Daughtery, Solaliz Hernandez and Debra Krystyn—claim that Temu, also known as Whaleco Inc., and its parent company, PDD Holdings, “aggressively” collected their user data, which includes biometric information.
“The Temu app is purposefully and intentionally loaded with tools to execute virulent and dangerous malware and spyware activities on user devices which have downloaded and installed the Temu app,” experts quoted in the suit said. “Temu misled people about how it uses their data.”
According to the experts consulted by Hagens Berman Sobol Shapiro and Aurelias Law Group for the suit, the Temu app collects user data beyond what’s necessary for online shopping, including biometric data such as facial characteristics, fingerprints and voiceprints. The experts also concluded that the app collects a greater amount of information from users than disclosed, claiming that it “bypasses phone security systems to read a user’s private messages, make changes to the phone’s settings and track notifications.”
Earlier this year, Apple told Politico that Temu had previously violated mandatory privacy rules by misleading people about how it uses the data it collects and wouldn’t let users choose not to be tracked on the internet. But Apple said Temu resolved those issues in July. In March, Google suspended Temu’s sister Chinese platform, Pinduoduo, after it found malicious software in versions of the app.
The class-action suit also calls out Temu for its marketing practices and the merchandise it carries, such as employing paid influencers to drum up customers for the app and selling goods that are “frequently of low quality or counterfeit.”
“Defendants employ a variety of manipulative and deceptive business practices in an effort to get users to urge friends and acquaintances to sign up for the Temu app, thereby subjecting new users’ data to unlawful collection by Defendants,” the suit said. “For example, Temu users are bombarded with notifications seeking to entice them to refer new users in exchange for prizes and discounts.”
The lawsuit seeks a jury trial and permanent injunction against Temu to stop it from collecting consumer data, as well as damages for the plaintiffs.
