This is what ‘data theft’ is all about, Arkansas attorney general says in lawsuit

Brief description of the dive:

• Court documents show that fast fashion giant Temu is facing a consumer protection lawsuit filed by Arkansas Attorney General Tim Griffin. Tuesday press release.
• Griffin said in a statement that Temu is not an online marketplace but “a data theft company that sells goods on the Internet as a means to an end.” The complaint names Temu’s holdings, PDD Holdings and Whaleco, and references reports that Temu collects users’ personal information without permission.
• A Temu spokesperson told Fashion Dive in an email that the company was surprised and disappointed that the Arkansas Attorney General’s office filed the lawsuit “without any independent fact finding.” A spokesman said the allegations “are based on misinformation circulating online, primarily from short-sellers, and are completely baseless.”

Diving Insight:

The complaint was submitted on Tuesday at Circuit Court of Cleburne County, Arkansasclaims violations of the state’s Deceptive Trade Practices Act and the Privacy Act.

The attorney general says Temu’s code was “deliberately designed to evade front-end security checks and alter its own code once downloaded to a user’s phone.” The complaint states that this allows the app to exploit user data.

Ten faces two separate class action lawsuits over similar claims listed in the attorney general’s complaint. That’s according to the first, filed in September 2023 He didn’t provide any customers with this personal and financial data and accused the company of eavesdropping on the electronic communications of people visiting its website. The second, filed last November, argued Ago collected data “beyond what is necessary for an online shopping application,” including biometric information such as facial features, voiceprints and fingerprints.

A Temu spokesman said the company categorically denies the allegations and will defend itself.

“We understand that as a new company with an innovative supply chain model, some may misunderstand us at first glance and not welcome us,” the spokesperson said. “We are focused on the long term and believe that the analysis will ultimately benefit our development. We are confident that our actions and contributions to the community will speak for themselves over time.”

Temu’s popularity has skyrocketed following its US launch in 2022. A recent report by marketing software company Omnisend found that people shop at Temu because of the prices, easy-to-use platform and frequent offers and discounts. In this study, 68% of respondents said they had shopped at Temu. In the US, consumers said they trusted e-commerce giant Amazon more (86%), while only 6% of respondents said they trusted It.

Still, about 17.5% of respondents globally said they think Temu has the potential to overtake Amazon as the leading e-commerce platform.