Nebraska AG Sues Temu Over Alleged Consumer Protection Violations
Nebraska Attorney General Mike Hilgers announced Thursday that his office had filed a lawsuit against low-priced e-commerce platform Temu.
The complaint alleges a host of consumer protection violations, including misrepresentation of goods, greenwashing, embedding illegal malware into consumers' personal devices and sharing Nebraskans' data with the Chinese Communist Party.
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The crux of the complaint is centered around consumers' data. Hilgers alleges in the complaint that Temu has illegally 'siphoned' personal information about Nebraskan consumers, leaving them at risk. Hilgers said Temu's famously low-cost products 'come with a one-two punch to Americans.'
'Temu's app operates as malware; its code is designed to exfiltrate an enormous amount of sensitive information, from access to a user's microphone, pictures and messages, to information sufficient to track their movements,' Hilgers alleged in the complaint. 'This sensitive information that is unlawfully exfiltrated to Temu naturally flows to its powerful patron—the Chinese Communist Party. In the United States's great power competition with China, Temu presents yet another way in which China can extract and exploit information about Americans for its own purposes.'
Temu was founded in China and is a subsidiary of PDD Holdings, but its headquarters are now located in Boston.
A spokesperson for Temu said the claims made in the complaint are untrue.
'The allegations in the Nebraska Attorney General's lawsuit are without merit and appear to be a rehash of misinformation circulated online, much of it originating from a short-seller. We categorically deny the allegations and will vigorously defend ourselves against them,' the spokesperson told Sourcing Journal via email.
This isn't the first time Temu has come under fire for the way it handles consumer data; in June 2024, Arkansas Attorney General Tim Griffin announced that the state had filed a lawsuit against Temu, calling it 'a data-theft business that sells goods online as a means to an end.'
Last year, Republican members of Congress asked the U.S. Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI) to pursue further information about Temu and its business practices.
Throughout the rest of the complaint, Hilgers goes on to allege that the means by which Temu entices Nebraskan consumers are also unlawful. He alleges that the company uses greenwashing to mislead consumers and that it deceives consumers with its local warehousing business model, leading them to believe that they are purchasing from local businesses.
'Temu misleadingly uses the 'local' tag for products shipped from warehouses located in the United States,' Hilgers contended. 'These products could originate from foreign countries, such as China, but Temu passes them off as local goods because the products are temporarily stored for distribution in the United States.'
In this section of the complaint, Hilgers is referring to the fact that Temu has been making a push for what it refers to as 'local warehouses.' These warehouses, located in markets of interest, like the U.S. and the EU, make it possible for the company to get products to consumers' doorsteps faster than sending them directly from China. While it has looked to onboard U.S. sellers, many of the sellers who use these local warehouses are based in China.
Hilgers further said that the platform is 'awash in products infringing copyrights and other intellectual property.'
In the complaint, the attorney general states that Nebraska believes Temu is in violation of multiple state laws, including its Uniform Deceptive Trade Practices Act and its Consumer Protection Act. Hilgers asks the judge overseeing the case to enjoin Temu from 'continuing to engage in such unlawful acts and practices' and to award affected Nebraskan consumers compensation.
Hilgers said the lawsuit is intended to shield the state's residents from unlawful company conduct.
'Temu is putting Nebraskans' privacy at risk and running a platform rife with deceptive listings, unlawful promotional practices, and products that rip off Nebraska brands and creations,' he said in a statement. 'Our office will hold Temu accountable for its exploitation of Nebraska consumers, brands and creators and fight hard for honesty and safety in the online marketplace.'
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