Temu class action moves to arbitration as shoppers say company hid privacy breaches to steal data

Update: 

• A New York federal judge ordered plaintiffs accusing Temu of privacy violations to arbitrate their claims, ruling that the arbitration agreement in Temu’s terms is valid and enforceable.
• U.S. District Judge Margo K. Brodie found that questions about the scope of arbitration must be decided by an arbitrator, rejecting the plaintiffs’ arguments that the delegation clause and batch arbitration provisions were unconscionable.
• Claims brought on behalf of nonusers or individuals whose data was allegedly collected through communications with Temu users were dismissed for lack of standing.
• The court granted jurisdictional discovery to explore whether Temu’s parent company, PDD Holdings Inc., can enforce the arbitration agreement.
• The Temu class action alleges that Temu’s app collects personal and biometric data from users and nonusers without consent and poses serious risks to data privacy.

Temu data class action lawsuit overview: 

• Who: A group of consumers filed a class action lawsuit against Whaleco Inc., doing business as Temu, and PDD Holdings Inc., formerly known as Pinduoduo Inc. 
• Why: Consumers claim Temu, a Chinese-owned online shopping platform, collects more data from its users than is necessary and in a greater amount than what it discloses. 
• Where: The class action lawsuit was filed in Illinois federal court. 

(Nov. 9, 2023)

Online shopping platform Temu collects data from its users beyond what is necessary and in a greater amount than is disclosed, a new class action lawsuit alleges. 

A group of Temu users argue experts concluded Temu “purposefully and intentionally” loaded tools into its app that “execute virulent and dangerous malware and spyware activities on user devices.” 

“According to these experts, Temu collects user data beyond what is necessary for an online shopping app, including biometric information and data from users of the app,” the class action states. 

Temu users want to represent a nationwide class and Illinois, California and Virginia subclasses of consumers who have used the platform. 

Experts found Temu conceals alleged privacy violations, class action says

Experts determined Temu has “gone to great lengths” to conceal alleged privacy violations from its users so it can continue to steal their data, the class action alleges. 

Temu users argue the alleged privacy violations are especially concerning given Temu is a Chinese-owned company, meaning the data it collects is “ultimately available to individuals and entities in China.” 

“Under Chinese law, in turn, such user data possessed by, controlled by or accessible to individuals and entities in China may be demanded by the government at any time,” the Temu class action lawsuit states. 

Temu users claim the company is guilty of unjust enrichment and violating the Computer Fraud and Abuse Act, the Electronic Communications Privacy Act of 1986 and a variety of state laws. 

However, a Temu spokesperson told Top Class Actions the class action lawsuit’s allegations are largely derived from a report by a short-selling firm, which has vested commercial interests in disseminating negative misinformation.

“We strongly oppose the allegations contained within it,” the spokesperson says. “Furthermore, the same law firm has recently initiated class action lawsuits against companies such as Amazon and Apple.”

The plaintiffs demand a jury trial and request declaratory and injunctive relief along with an award of compensatory, statutory and punitive damages for themselves and all class members. 

Temu disputed a separate complaint last month filed by rival online marketplace Shein; the complaint claimed Temu used thousands of copyrighted images as promotional photos on its website. 

Have you used Temu? Let us know in the comments. 

The plaintiffs are represented by Steve W. Berman and Jeannie Evans of Hagens Berman Sobol Shapiro LLP and Douglas G. Smith of Aurelius Law Group LLC. 

The Temu data class action lawsuit is Ziboukh, et al. v. Whaleco Inc. d/b/a Temu, et al., Case No. 1:23-cv-15653, in the U.S. District Court for the Northern District of Illinois.

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