'Temu Is Functionally Malware': Arkansas AG Files Lawsuit Against Chinese Retailer, Calls It A 'Data Theft Business'

Increasingly popular Chinese online budget retailers, such as PDD Holdings‘ PDD Temu, offer products at dirt-cheap prices. One U.S. state launched a lawsuit against Temu for deceptive practices amid greater geopolitical escalation between the U.S. and China.

What Happened: Arkansas Attorney General Tim Griffin announced the lawsuit against Temu on June 25.

"Temu is not an online marketplace like Amazon or Walmart. It is a data-theft business that sells goods online as a means to an end,” the statement said. “Though it is known as an e-commerce platform, Temu is functionally malware and spyware. It is purposefully designed to gain unrestricted access to a user's phone operating system. It can override data privacy settings on users' devices, and it monetizes this unauthorized collection of data.”

Griffin alleges that Temu violates the Arkansas Deceptive Trade Practices Act and the Arkansas Personal Information
Protection Act.

Temu rigorously denies Griffin’s implications, describing the lawsuit as built “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,” a Temu spokesperson told Fox Business.

Why it Matters: Temu has become widely used in the U.S. since 2023, becoming the most downloaded app on Apple‘s App Store while capturing a significant share of the online retail market. As of July, Amazon.com Inc is preparing to launch its own budget retail site to compete with Temu.

Meanwhile, policymakers in the European Union are weighing a customs overhaul on Temu goods.

While many U.S. politicians have urged actions against China as a legitimate security measure, others place it alongside documented instances of Sinophobia and a supposed jingoism since the 2020 COVID-19 pandemic.

Congress passed a bill in April requiring that fellow Chinese company ByteDance divest its U.S. TikTok operations or face a nationwide ban. The bill was initiated by similar concerns over national security.

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