Temu agrees to data privacy curbs in Texas lawsuit

Texas has reached a settlement with Chinese e-commerce platform Temu, agreeing to stricter data privacy measures in response to allegations of unauthorized data access from American users, according to documents released on Friday. The company faces multiple lawsuits from various US states over concerns that it unlawfully collects user data that could potentially be accessed by the Chinese government. This marks the first resolution of such claims by the company.

As part of the settlement, Temu will restrict access to personal data of Texas shoppers to US-based servers, preventing it from sending data to China. The retailer must also conduct annual independent safety testing on its products to identify any containing dangerous chemicals or materials. Any products found to contain hazardous substances will be removed, and the seller will be terminated. Affected Texas consumers will be notified and provided with full refunds.

Texas Attorney General Ken Paxton emphasized that the settlement requires Temu to implement stringent product audits and safety standards to protect consumers from hazardous materials in items such as clothing and children's products. Failure to comply with the data security provisions could result in a potential $8 million penalty annually for each violation.

Temu, which had over 82.4 million active users in the US as of September 2023, agreed to the settlement without admitting to any wrongdoing. The company stated that it aims to continue serving consumers and supporting businesses in Texas.