Texas Attorney General Ken Paxton filed suit against PDD Holdings Inc. and Whaleco Inc., doing business as Temu, in Collin County District Court, alleging the online shopping platform engaged in deceptive trade practices and unlawfully harvested Texans’ personal data.
The filing marks another lawsuit Paxton has announced this week against companies he alleges maintain ties to China. Earlier, the Office of the Attorney General filed actions in Collin County District Court against TP-Link Systems Inc., Anzu Robotics LLC, and Lorex Technology Inc. under similar provisions of the Texas Deceptive Trade Practices Act.
The State filed the lawsuit under the Texas Deceptive Trade Practices Act and seeks civil penalties, injunctive relief, and restrictions on Temu’s data practices.
Petition Alleges Temu App Exceeds Normal Retail Function
According to the petition, Temu presents itself as a low-cost online marketplace offering “affordable great products,” but allegedly incorporates software functions that exceed what is necessary for a standard e-commerce application.
The petition states:
“Temu is actually spyware disguised as a shopping app.”
The State alleges the app requests permissions that allow access to device logs, external storage, installation packages, and precise location data, and that these capabilities were not clearly disclosed to users.
The petition further alleges that once granted storage permissions, the app could access chat logs, images, and content from other applications on a user’s device.
Corporate Structure And China Operations Cited
The filing identifies Temu as operated by Whaleco Inc., a Delaware corporation headquartered in Boston, and as owned, through a chain of entities, by PDD Holdings Inc., which maintains significant operations in China.
The petition references China’s National Intelligence Law and alleges companies operating in China may be required to cooperate with national intelligence authorities.
Governor Greg Abbott has included PDD Holdings on Texas’ Prohibited Technologies List, the petition states.
Deceptive Pricing And Promotion Claims
Beyond data practices, the State alleges Temu used misleading promotional tactics to increase downloads and sales.
The petition claims Temu:
- Advertised “free” product promotions that required multiple referrals and purchases to complete
- Promoted “credit-back” offers that did not provide the advertised percentage return
- Used inflated reference pricing to create the appearance of steep discounts
- Misrepresented the quality of goods sold on the platform
The lawsuit cites Better Business Bureau complaints and cybersecurity research referenced within the petition.
Relief Sought
Paxton is seeking:
- Civil penalties of up to $10,000 per DTPA violation
- Additional penalties for violations involving consumers age 65 or older
- Temporary and permanent injunctions
- Orders prohibiting certain data collection practices
- Requirements that Temu disclose data practices and foreign legal obligations
In a press release announcing the filing, Paxton said:
“Temu is Chinese Communist spyware disguised as a shopping app. Texans deserve transparency, privacy, and protection from foreign adversaries that exploit their personal data.”
Temu has not publicly responded to the lawsuit.
