From low prices to a wide range of products, online marketplace Temu has grown to a large customer base of 130 million app users after initially launching in Sept., 2022. However, its user data practices recently drew controversy as the company was charged with a class action lawsuit. 

Temu is an e-commerce website created by PDD Holdings, the parent company of Pinduoduo, Temu’s sister location in China. The company operates by transporting items from suppliers in China to consumers in Europe and the US, which they claim is the reason for their lower prices compared to other retailers. In order to maintain low prices, the company sells non-name brand products. 

Temu loses an average of $30 on every package it sells, which has led to the company losing $3.56 billion in its first year of sales. However, the company continues to offer discounts and cheap prices in order to increase its popularity among consumers. Along with its discounted packages, it also offers free items for people who share the app with their friends and family.

Despite its lower prices, some customers have criticized Temu due to a 2.56 out of 5 stars review on the Better Business Bureau, which was designated to the company after numerous complaints of late packages, random charges and poor refund communication.

The app itself, however, has been the center of attention since a class action lawsuit was filed on Nov. 3, 2023, which alleges that the Temu app is engineered to execute malware and spyware activities. The plaintiffs claim that the app collects data that is “beyond what is necessary for an online shopping app, including biometric information and data from users of the app.” They further accused Temu of using extensive technology including “a complete arsenal of tools to exfiltrate virtually all the private data on a user’s device and perform nearly any malign action upon command trigger from a remote server.” 

The plaintiffs also referenced how Pinduoduo, Temu’s sister app, was recently suspended from the Google Play Store “due to the presence of malware on the Pinduoduo app that exploited vulnerabilities in Android operating systems.” Apple recently concluded that Temu “violated the company’s privacy rules.” Users also claim that Temu’s private data collection is far greater than what the app leads consumers to believe and violates the Computer Fraud and Abuse Act, Electronic Communications Privacy Act of 1986 and the Massachusetts Wiretap Act.

Temu has responded to the allegations with claims that the lawsuit’s allegations mainly derive from the reports of one short-selling firm, which has spoken about its interests in disseminating misinformation.

As the lawsuit ensues, experts suspect that the results could impact the future of the online shopping industry, as many companies share similar policies with Temu’s private user data collection practices.