Americans Warned to Stop Shopping via Chinese App Temu

The top prosecutor in Arkansas warned on July 2 that Americans should be wary of using the Temu marketplace app because it’s effectively a “data theft business.”

“The threat from China is not new, and it is real,” Arkansas Attorney General Tim Griffin told Fox Business on July 2, a week after his office filed a lawsuit against the company. “Temu is not an online marketplace like Amazon or Walmart. It’s a data theft business that sells goods as a means to an end.”

He said that it’s “common for an online marketplace like Amazon, like Walmart, to collect certain consumer data as part of the normal course of business. I think we all know that that’s not what’s going on here.”

Instead, the company is using malware and spyware to “get into your phone, your device, and to collect your data,” Mr. Griffin told the outlet.

“Not just traditional consumer data, but using malware, spyware to have complete access to your information. And [taking it] one step further, their code is written in such a way to evade detection,” he said.

Temu is operated by Shanghai, China-based parent company Pinduoduo Inc., which includes “former Chinese communist officials” in its ranks, Mr. Griffin said.

The lawsuit, filed against the firm’s parent company, is seeking a jury trial as well as a permanent block against Temu’s data-collection activities. It also seeks a $10,000 fine for each violation of an Arkansas state law known as the Deceptive Practices Act.

The suit primarily cites research from Grizzly Research, which analyzes publicly traded firms, and alleges that Temu can “purposely … gain unrestricted access to a user’s phone operating system, including, but not limited to, a user’s camera, specific location, contacts, text messages, documents, and other applications.”

In its report, Grizzly Research said that it suspects that Temu is “already, or intends to, illegally sell stolen data from Western country customers to sustain a business model that is otherwise doomed for failure.”

“Temu is estimated to be losing $30 per order. Its ad spending and shipping costs (1 to 2 weeks from China, expedited to U.S. delivery) are astronomical,” the report states.

“One is left wondering how this business could ever be profitable. Temu is a notoriously bad actor in its industry. We see rampant user manipulation, chain-letter-like affinity scams to drive signups, and overall, the most aggressive and questionable techniques to manipulate large numbers of people to install the app.”

In a statement after the lawsuit was filed, Temu stated that it was “disappointed” and said the lawsuit doesn’t cite “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,” the firm stated. “We understand that as a new company with an innovative supply chain model, some may misunderstand us at first glance and not welcome us.”

According to analytics website Backlinko, Temu was the most downloaded shopping app around the world in 2023, with more than 330 million downloads—about 1.8 times more than the Amazon Shopping app.

On July 1, the Texas Public Policy Foundation issued a similar warning about the app, saying that it “can access almost anything on your phone,” which means that Chinese Communist Party officials “could theoretically install applications and spyware files on an individual’s smart device to use for complete surveillance of all user activity on a phone.

“This would allow China to monitor keystrokes and logs to have direct insight into login credentials for other social media, emails, and bank accounts,” the foundation warned.

Temu officials didn’t respond by press time to a request by The Epoch Times for comment.