Shopping with a Side of Surveillance: Temu Faces Data Privacy Lawsuit

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Temu Accused of Mishandling Customers Personal Information and Misleading App Users About Data Use in Class Action Lawsuit

You might think you’re getting bang for your buck when you buy a cheap outfit on Temu, but the company is getting a lot more than you bargained for in return, a lawsuit claims. 

Shoppers who use the Temu app on their phones have filed a proposed class action lawsuit against the online giant’s parent companies accusing them of using “deceptive, manipulative, and unscrupulous practices to maximize their access to user data,” violating a number of U.S. laws in the process. 

The shoppers go so far as to claim Temu deploys a "complete arsenal of tools to exfiltrate all the private data on a user's device."

‘A dark side’ of online shopping

Temu shoppers from Massachusetts, California, Illinois, New York, and Virginia filed the amended proposed class action lawsuit in Illinois federal court against PDD Holdings Inc. and Whaleco Inc., who together do business as Temu. 

They claim in the lawsuit that the online marketplace, which burst onto the U.S. scene in 2022 offering cut price products, “has a dark side” and uses "deceptive" and "unscrupulous" practices to spy on its customers. “Temu app is purposefully and intentionally loaded with tools to execute virulent and dangerous malware and spyware activities on user devices which have downloaded and installed the TEMU app,” the lawsuit says.

Jeannie Evans, one of the plaintiffs' attorneys, told CBS News the company can collect contact information, text messages, phone device identifiers, precise location data, “lots of things that there's really no reason for a shopping app to need," Evans said. "It can gain access to your camera on your phone; to your microphone on your phone that could be collecting biometric information, face images, voice prints."

Temu challenges claims

A spokesperson for Temu told CBS News the company categorically denies the allegations. "The truth is that safeguarding privacy is one of Temu's core values. Our privacy practices are in line with industry standards and are transparently disclosed in our Privacy Policy. 

Temu also has a ‘permissions’ section in the Temu app and website that clearly explains the device features that Temu does and does not access,” the spokesperson said. The company also challenged the source of the reports, saying they were put out by a short-seller who wanted to drive Temu’s stock down.

But some consumer advocates don’t agree that Temu is committed to safeguarding privacy, with Boston 25 News Consumer Adviser Clark Howard telling the outlet: “If you download Temu’s app, you’re going to find that you are allowing an enormous invasion of your privacy. You’re giving them permission to look at so much of your personal, private stuff that’s on your phone.”

A blockbuster app 

Temu, a Chinese company, made its American debut in 2022 and climbed to the top of Apple’s most downloaded app charts last year. It has more than 100 million active users and climbing, according to the Business of Apps

The online shopping megastore offers everything from car accessories to baby clothes to light fittings — and everything in between. It is well-known for providing quick knock-offs of popular and expensive styles. And its most popular feature is that its offerings are all extremely cheap.  But, allegations of forced labor, a dangerous workplace culture, and data privacy concerns bring into question the real cost of those cheap deals. 

Meanwhile, Temu sued competitor Shein in December alleging the company uses “Mafia-style” intimidation tactics on merchants, The Verge reported.

Online giants payout for privacy issues

Retailers aren’t the only online giants that gather and use customers' data to their benefit, and have faced legal action for it. In December, Google agreed to pay a $5 billion settlement in a lawsuit with users who alleged the technology company secretly tracked the internet use of millions of people who thought they were doing their browsing privately. 

TikTok agreed to pay $92 million to settle allegations it violates consumer privacy, storing users biometric data without warning, and Facebook paid out $725 million to settle claims it violated users’ privacy by sharing their data with third parties. 

How to keep your data safe

Cyberbit CEO Caleb Barlow told Boston 25 News that in order to keep their data safe, consumers need to check their phone’s settings to find out what they’re allowing third-party apps to see. “The first thing we really have to think about as consumers is does this app need access to this data?” Barlow said. “What we have to recognize with apps coming out of China is that they fall under a different regiment from a privacy perspective than what we’re used to here in the United States.”

As an app user, the most important thing you can do to protect your privacy is limit your data sharing in your own phone settings and in the app settings when you download the app. 

If you think your data was illegally accessed by Temu, you might be eligible to join the proposed class action lawsuit. The shoppers want to represent app users nationwide, and they are suing for violating the Computer Fraud and Abuse Act, the Electronic Communications Privacy Act of 1986, and Massachusetts privacy laws.

The plaintiffs and proposed class are represented by Steve W. Berman and Jeannie Evans of Hagen Berman Sobol Shapiro LLP, and Douglas G. Smith of Aurelius Law Group LLC.

The Temu data privacy class action lawsuit is Ziboukh et al v. WhaleCo Inc. d/b/a Temu et al, Case No. 1:23-cv-15653, in the U.S. District Court for the Northern District of Illinois.

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