Attorneys General of 21 States Target Temu Over ‘Disturbing’ Compliance Issues
Temu is under fire by 21 states’ attorneys general, questioning the company’s business practices around forced labor and consumer data privacy, as well as its potential ties to the Chinese Communist Party (CCP).
The states’ attorneys general sent a letter to Qin Sun, Temu’s president, and Chen Lei, CEO of PDD Holdings, Temu’s parent company, detailing 11 questions they demand the answers to.
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The inquiries ask Temu to disclose how it collects and stores consumers’ data; whether the company sells consumer data; how the company certifies that products sold on its platform have not been touched by forced labor; the ways in which it audits its sellers and suppliers and more. The questions also pertain to Temu’s purported connections with the CCP, which a number of U.S. officials have previously expressed worry over.
The letter points to a report from the House Select Committee on the CCP, published in June 2023, that accuses Temu of uncouth forced labor vetting practices.
“Just last year, the United States House Select Committee on the Chinese Communist Party revealed disturbing information about Temu’s failure to comply with American laws prohibiting the use of forced labor by Uyghurs,” the letter wrote, referencing Temu’s alleged skirting of the Uyghur Forced Labor Prevention Act (UFLPA), which prohibits goods made in whole or in part in China’s Xinjiang Uyghur Autonomous Region (XUAR) from entering the United States.
“Temu’s business model, which relies on the de minimis provision, is to avoid bearing responsibility for compliance with the UFLPA and other prohibitions on forced labor while relying on tens of thousands of Chinese suppliers to ship goods direct to U.S. consumers,” the report mentioned in the letter read, continuing, “Temu admitted that it ‘does not expressly prohibit third-party sellers from selling products based on their origin in the Xinjiang Autonomous Region.’”
Temu and its competitor Shein are notorious for their use of the de minimis provision, which allows packages valued under $800 to be shipped into the U.S. without the scrutiny or tariffs higher-value packages face. As other countries lower or close their de minimis thresholds, some lawmakers in the U.S. have started the process for examining the country’s own threshold.
The attorneys general took issue with the findings of that report and have taken it upon themselves to get answers about the company’s forced labor protocols directly from the source. They also wrote that their concerns stem from laws around consumers’ rights and protections, both around potentially hazardous recalled products and around consumers’ privacy.
“Beyond the concerns raised by Temu’s likely (and extensive) violations of federal law, this ongoing conduct raises serious concerns about Temu’s compliance with state consumer protection laws,” the attorneys general wrote. “These concerns extend to products sold exclusively on Temu’s website that fail to adequately warn consumers of dangers associated with their products and fail to notify consumers [that] the products are subject to safety recalls.”
Austin Knudsen, attorney general of Montana, led the effort to pen and send the letter. In it he expressed specific concern that the company would “flout” the state’s incoming Montana Consumer Data Privacy Act, which goes into effect on October 1.
Attorneys general from Alabama, Alaska, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Hampshire, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Virginia and West Virginia co-signed the letter, sent to Temu and PDD on August 15.
The attorneys general wrote that they have asked the questions in the letter as an “opportunity to clarify these reports and findings or to provide evidence of any policies and procedures that have been updated or modified since the findings of the Select Committee last year.”
The attorneys general requested responses from Temu within 30 days of the letter being sent to Sun and Li.
The letter only adds to Temu’s regulatory issues—not just in the U.S., but in the EU bloc and other jurisdictions. The company continues to face intense scrutiny in the United States. Earlier this year, Tim Griffin, the Arkansas attorney general, announced the state had filed a lawsuit against the company, alleging “deceptive trade practices” and consumer data theft.
Temu did not return Sourcing Journal’s request for comment on the letter.
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