Temu Faces Storm of Controversy: Lawsuits, Investigations, and Allegations of Data Manipulation
Temu, the fast-growing Chinese e-commerce platform, faces a storm of controversy. It's under investigation by Congress and the subject of multiple lawsuits, with customers and competitors alleging a range of misdeeds, from data manipulation to unauthorized withdrawals.
The Better Business Bureau has reported over 900 complaints of unauthorised bank account withdrawals following purchases on Temu. Meanwhile, both Temu and its rival Shein are under congressional scrutiny for their sourcing and labour practices.
A lawsuit led by plaintiff Eric Hu accuses Temu of collecting personal data from third-party websites without consent. The Austrian Ministry of Social Affairs has also criticised Temu for manipulating customers to disclose personal data and encouraging excessive spending through tactics like luck wheels and artificial time pressure. This allegedly violates consumer protection laws and the EU Digital Services Act.
Temu is also accused of not promptly disclosing data breaches and failing to secure customers' personal and financial data, leading to a class action lawsuit. The platform's in-app browser is suspected of tracking users' activity on third-party websites without their knowledge or consent.
The rivalry between Temu and Shein has spilled over into legal battles. Shein sued Temu in late 2022 for allegedly mimicking its social media presence and tricking users into downloading the Temu app. Temu countersued Shein in July, accusing it of coercing suppliers not to do business with Temu.
Temu's rapid growth has been accompanied by a series of serious allegations. As investigations and lawsuits continue, the company must address these concerns to restore customer trust and avoid further legal repercussions.
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