Temu has reached an agreement with the State of Texas, committing to new data security and product safety measures as part of a $3 million settlement. The online retailer faced allegations that it had compromised consumer data and sold products containing hazardous chemicals.
Texas Attorney General Ken Paxton announced the settlement on October 16, describing it as a significant achievement for data privacy and consumer safety, emphasizing that Texans deserve assurance about the safety of the products they purchase.
The lawsuit was initiated by the attorney general’s office in February, citing concerns that Temu was exposing customers’ personal information to entities in China. Additionally, the lawsuit pointed out that some items sold on the platform contained harmful substances, posing potential health risks to consumers.
Under the settlement terms, Temu is mandated to carry out annual safety testing to check for harmful or toxic materials in its products. If any such items are identified, the company must notify affected consumers in Texas and provide refunds.
The retailer will also implement stringent data management practices. This includes storing customer data on American servers and limiting the sharing of information with Chinese entities to only what is necessary for transaction fulfillment.
The settlement specifically applies to consumers in Texas. In addition to the $3 million payment to the state, which covers civil penalties, legal fees, and investigative expenses, Temu could incur further penalties of up to $8 million annually if it fails to adhere to the newly established data privacy standards.
This agreement is part of a broader initiative by Texas to restrict foreign access to the personal data of its residents. Earlier this year, Governor Greg Abbott announced an expanded list of companies and products prohibited from use on state networks and government-issued devices, which included Temu and the fast fashion retailer Shein.
