Kentucky is latest state to sue Temu over fake sales

Kentucky Attorney General Russell Coleman has filed a lawsuit against Temu, the Chinese online shopping platform, for unlawful data collection, violations of customers' privacy, and counterfeiting some of Kentucky’s most iconic brands.

The lawsuit claims Temu is not just selling counterfeits through its app, but also illegally collects users' data without their knowledge and consent, provides "unfettered access" to that data to the Chinese government, uses forced labour from Chinese ethnic minorities in clear violation of US trade policies, and steals the intellectual property of US-owned companies.

Several other US states, including Arkansas and Nebraska, have also filed lawsuits against the omline retailer making

"Temu’s cheap products and flashy marketing hide real danger. Their platform can infect Kentuckians’ devices with malware, steal their personal data and send it directly to the Chinese government,” said AG Coleman.

"At the same time, they’re eroding trust in some of Kentucky’s most iconic brands, which could lead to job losses and hardship," he added. "Kentuckians need a strong defense against this aggression, and that’s exactly what the Attorney General’s Office intends to do.”

Temu – owned by PDD Holdings, the parent company for Chinese e-commerce platform Pindoduo – has risen in popularity to become the most-downloaded mobile app in the US in 2023, according to the lawsuit.

The complaint alleges that the organisation behind the app has used that popularity to collect massive quantities of information about customers, all without their knowledge or consent.

Temu is owned by a multibillion-dollar Chinese holding company, PDD Holdings, whose first retail app, Pinduoduo, was eventually removed from the Google and Apple app stores in the US after being linked to malware.

According to the Kentucky AG, the Temu app shares a significant amount of its code with the original Pinduoduo app and has a documented relationship with the Chinese Communist Party. Last year, a group of 21 state attorneys general sent an open letter (PDF) to Qin Sun, Temu’s president, and Chen Lei, chief executive of PDD Holdings, seeking answers about business practices and ties to the ruling Chinese Community Party (CCP).

Responding to the lawsuit, a Temu spokesperson said: "The allegations in the Kentucky Attorney General’s lawsuit are based on misinformation circulated online, primarily from a short-seller, and are totally unfounded. We categorically deny the claims and will defend ourselves vigorously."

It continued: "We understand that as a new company with an innovative supply chain model—one that begins by bringing the global supply chain directly to the end consumer—some may misunderstand us at first glance and not welcome us. We are here for the long term and are eagerly listening and improving. We 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."

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