A coalition of 21 Attorneys General, led by South Dakota Attorney General Marty Jackley, is demanding answers from the online retailer Temu regarding its alleged ties to the Chinese Communist Party (CCP) and concerns over forced labor practices. The letter, addressed to Qin Sun, President of Temu, and Chen Lei, CEO of PPD Holdings, requires a response within 30 days [b6b7ee18]. This scrutiny comes amid growing concerns about Temu's data collection practices and its compliance with the Uyghur Forced Labor Prevention Act (UFLPA) [b6b7ee18]. Congressional findings have suggested that Temu may be selling products made by forced labor, raising significant ethical and legal questions [b6b7ee18].
This investigation adds to the mounting regulatory challenges Temu faces in both the United States and the European Union. The platform has already been under fire for its sales practices and compliance with the Digital Services Act (DSA) in Europe, where consumer organizations have filed complaints against it for various violations, including trader traceability and transparency in product recommendations [947ae70a]. The European Consumer Organization (BEUC) has taken legal action against Temu for allegedly misleading consumers and complicating account closures, which could result in fines of up to 6% of its global annual turnover [115ce6a6].
Temu's rapid growth has been notable, with its gross merchandise value (GMV) reaching approximately $20 billion in the first half of 2024, significantly surpassing its total sales of $18 billion in 2023 [d11aba14]. However, this growth has not come without scrutiny. The platform is also facing allegations of copyright infringement and intellectual property rights violations, further complicating its operational landscape [73f33d9f].
In addition to the legal and regulatory challenges, Temu's competitive landscape is intensifying. TikTok and Amazon have recently announced a collaboration that allows TikTok users to purchase Amazon products directly through the app, which could further challenge Temu's market position [92b8e933]. This partnership reflects a broader trend of social media platforms integrating e-commerce functionalities, which could impact Temu's sales as it navigates these challenges.
As the Attorneys General's investigation unfolds, Temu will need to address these serious allegations and regulatory concerns to maintain its reputation and continued growth in the competitive e-commerce market.