AG Griffin sues Temu, says Chinese online seller app ‘malware’

by Steve Brawner ([email protected]) 447 views 

Arkansas Attorney General Tim Griffin announced Tuesday (June 25) that he is filing suit against the Chinese parent companies of Temu, the online marketplace, saying its app collects far more information than needed and functions as malware.

Griffin filed suit in Cleburne County Circuit Court against parent companies PDD Holdings and WhaleCo.

The filing says the company’s apps are designed to gain unrestricted access to a phone’s operating system, to override data privacy settings, and to profit by selling data to third parties.

It says that Temu can gain access to a user’s camera, photos, location, contacts, text messages, documents and other applications. It can even collect biometric information such as fingerprints.

“You name it, they have access to it and are taking it,” Griffin said. “Your entire device is open for their perusal. In fact, I warned my staff yesterday that they should not be on this app.”

The filing says the app is designed to be undetected. It can change its own code once installed and override data privacy settings. The Temu app can identify other apps running on a device and track a user’s activities with those apps. It can modify files on a device, including other apps’ programming and the device’s operating system. The suit says users’ data is still at risk even when the app is not installed.

“Temu purports to be an online shopping platform, but it is dangerous malware, surreptitiously granting itself access to virtually all data on a user’s cell phone,” the filing says.

The filing says the company’s parent companies are violating the Arkansas Deceptive Trade Practices Act and the Arkansas Personal Information Protection Act.

The lawsuit seeks a court order enjoining the company’s deceptive trade practices and privacy violations, imposing civil penalties of up to $10,000 for each violation of the two acts, and providing other monetary and equitable relief. It wants the court to prevent Temu from acquiring, maintaining, and using Arkansans’ personally identifiable information.

Griffin said he hopes to learn more about how the data is being used through the lawsuit.

A spokesperson for Temu provided this statement to Talk Business & Politics:

“We are surprised and disappointed by the Arkansas Attorney General’s Office for filing the lawsuit without any independent fact-finding. The allegations in the lawsuit are based on misinformation circulated online, primarily from a short-seller, and are totally unfounded. We categorically deny the allegations and will vigorously defend ourselves.

“We understand that as a new company with an innovative supply chain model, some may misunderstand us at first glance and not welcome us. We are committed to the long-term and believe that scrutiny will ultimately benefit our development. We are confident that our actions and contributions to the community will speak for themselves over time.”

Arkansas is the first state to file suit against Temu, but Griffin said he expects other states to follow. While he has spoken to other attorneys general about the issue, he did not want to wait on them to file a multi-state lawsuit.

The filing says that Apple suspended Temu from its app store in 2023 for misrepresentations, which led to a congressional investigation. Google that year suspended Pinduoduo, the precursor to the Temu platform, from its Google Play app store because it contained malware.

The filing says Temu was launched in the United States in 2022 to sell low-cost Chinese manufactured goods. It was the most downloaded app in the United States in 2023. The company ran an advertisement in this year’s Super Bowl.

Parent company PDD Holdings was founded in China as Pinduoduo. The company moved to Dublin, Ireland, in 2023, but it continues to have significant operations in China. WhaleCo, which operates Temu, is headquartered in Boston, but Temu reports to PDD Holdings. The company is subject to Chinese law that requires cooperation with Chinese intelligence institutions, the suit says.

A colonel in the U.S. Army Reserve Judge Advocate General Corps, Griffin said China is not just an economic competitor. He said there has been an increasing wariness in recent years of the country’s strategic goals and activities.

“It’s all part of a plan, of a pattern, and data plays a really big role in that,” he said.

The filing also says the company has deceptively misrepresented the quality of its goods. Merchandise often does not match the photos on the site. It frequently sells counterfeit products. The platform has failed to protect minor users or ensure they had parental consent. The Better Business Bureau gives Temu a rating of 2.1 out of five stars.

“You may be thinking, how can they sell that so low?” Griffin said. “Because that’s not their business. Their business is the data. As I indicated, selling of the product, the marketplace, is a means to an end.”