Temu, Chinese e-commerce giant, faces legal battle in US after TikTok

The U.S. government has initiated an investigation into the Chinese e-commerce platform Temu for data theft and various business malpractices.

This scrutiny arises amid ongoing court proceedings involving TikTok, another Chinese-owned entity.

House Republicans have requested detailed briefings from the FBI and other intelligence agencies regarding how Temu manages American citizens' data. In a letter to the Securities and Exchange Commission and the FBI, Select Committee on Intelligence members raised multiple inquiries about investigations into Temu and its parent company, Pinduoduo.

Based in China?

While Temu was originally registered as a U.S. company in Boston, Massachusetts, lawmakers claim its actual headquarters are in Shanghai, China. They expressed concern over the abrupt suspension of Pinduoduo from the Google Play Store last year, following reports that the app could easily steal personal data from U.S. users by installing malicious software.

Launched for American consumers in 2022, Temu gained significant attention after Super Bowl ads in 2023 and 2024. The platform allows Chinese manufacturers to sell directly to buyers at competitive prices, drawing criticism from U.S. competitors.

This investigation comes at a time when the U.S. is still grappling with high inflation rates stemming from the pandemic. With presidential elections on the horizon, public frustration over rising prices is palpable.

'Platform offers variety and is cheap'

Sana Khalid, a frequent Temu shopper, said, “I enjoy the variety the platform offers, and it’s cheap,” though she noted concerns about the delivery system.

As Pinduoduo is listed on the Nasdaq stock market, Congress members are eager for American intelligence agencies to address questions regarding Temu's business practices.

Interestingly, data security is not always top of mind for frequent shoppers. Khawar Mehdi, who primarily uses Amazon, said, "Your data is not secure anywhere online. Once your details are out, how do you know who is using them?"

Calls for greater scrutiny align with Congress's broader inquiries into China’s manufacturing dominance in U.S. markets and the potential national security implications.

Last year, the House Intelligence Committee highlighted Temu's failure to comply with American laws prohibiting the use of forced labor by Uyghurs.

Temu had admitted it lacked a policy to prohibit the sale of goods from Xinjiang, where Uyghur Muslims face severe human rights abuses.

What's going on with TikTok?

In April, President Joe Biden signed a law compelling the app's parent company Byte Dance to sell TikTok within a year, or face a ban.

The ban on the popular video-sharing app has sparked a legal spat in the US.

At the hearing in federal court on September 16, the Chinese-owned company pleaded against the ban.

The three judges hearing the case at the U.S. Court of Appeals for the D.C. Circuit remained unsure if TikTok’s plea of free expression weighs heavier than the national security concerns expressed by Washington.

During the hearing, the judges said that millions of TikTok users across the US have First Amendment protections, which include freedom of expression, and the government forcing a ban on the app could violate those basic constitutional rights.

Unless upturned, the ban will come into effect on January 19. However, the case could likely drag on.

The case is being viewed as a decisive debate on digital free speech versus issues about national security in the US.

US officials have expressed concern that through TikTok China's government could gain access to users' data which could be used to spy on American citizens.

Recent polls suggest that public support to ban TikTok is falling in America.