Temu Faces Data Privacy Concerns in Mexico, US

Temu, a fast-growing Chinese e-commerce platform, is facing increasing scrutiny over its data privacy practices. Recent reports indicate that Temu collects extensive user data in Mexico and the United States, prompting legal actions and regulatory scrutiny.

The Federal Telecommunications Institute (IFT) in Mexico has identified Temu as the platform that collects the most user data among e-commerce applications in the country. According to IFT's Fifth Report on User Data Privacy in Digital Services, which analyzed privacy policies and terms from various tech companies as of May 24, 2024, Temu surpasses competitors like Amazon, Mercado Libre, and Shein in the volume of data collected. This data includes profile photos, videos, audio recordings, contact information, payment details, and location data.

Temu reportedly uses this data to enhance user experience by delivering targeted advertisements and personalized offers, a common practice among digital platforms. However, the extensive nature of the data collected by Temu has raised significant privacy concerns, given the sensitivity of the information involved.

Adding to these concerns, Tim Griffin, the Attorney General of Arkansas, has filed a consumer protection lawsuit against Temu. Griffin has described Temu not as a traditional online marketplace but as a “data-theft business that sells goods online as a means to an end.” The lawsuit, filed in Arkansas’ Cleburne County Circuit Court, alleges that Temu’s app is designed to evade security reviews and alter its code post-download, thereby exploiting user data. The lawsuit claims violations of the state's Deceptive Trade Practices Act and Personal Information Protection Act.

This legal action follows two separate class action lawsuits initiated in late 2023, which accuse Temu of failing to secure customers' personal and financial data and of collecting biometric information beyond what is necessary for an online shopping app.

In response, a Temu spokesperson denied the allegations, calling them “unfounded” and based on misinformation. The spokesperson emphasized Temu's commitment to transparency and long-term development, suggesting that the scrutiny may arise from misunderstandings about the company’s innovative supply chain model.

Despite these controversies, Temu continues to gain traction in the US market. Launched in 2022, the platform quickly became popular due to competitive pricing, a user-friendly interface, and frequent discounts. The United States and Mexico are the largest markets for the app, contributing nearly 40% of total app downloads since its release, according to Statista.

However, trust issues persist, with only 6% of US consumers expressing trust in Temu compared to 86% who trust Amazon, according to a report by Omnisend. Nonetheless, 17.5% of global respondents believe Temu could eventually surpass Amazon as the leading e-commerce platform.