Temu agrees to new data security, product safety standards to settle Texas lawsuit

AUSTIN, Texas - Online retailer Temu has agreed to implement new data security and product safety standards as a part of a $3 million settlement with the State of Texas. 

What they're saying:

Texas Attorney General Ken Paxton announced the settlement on Oct. 16, calling it a "historic victory for data privacy, consumer protection and Texans who deserve to know that the products they purchase are safe." 

The backstory:

The attorney general’s office filed a lawsuit against Temu in February over claims that the retailer was exposing customers’ personal data to China. The suit also claimed that products sold on the platform contained harmful chemicals and posed a health risk to consumers. 

What we know:

As a part of the settlement, Temu will be required to conduct annual safety testing to determine if any products contain harmful or toxic substances, and will have to notify and issue refunds to any affected Texans. 

The company has also agreed to new data restrictions. This includes storing customers’ data on American-owned servers, and ensuring that only information necessary to fulfill a transaction is shared with entities based in China. 

The terms apply specifically to Texas consumers. Temu will also pay $3 million to the state to cover civil penalties, attorney fees and investigative costs. 

What's next:

The attorney general’s office said the company could face fines of up to $8 million each year if it fails to comply with the agreed-upon data privacy standards. 

Dig deeper:

This follows a series of actions by the state aimed at limiting foreign access to Texans’ data. 

Earlier this year, Texas Gov. Greg Abbott announced an expanded list of companies and products barred from being used on state networks and government-issued devices. 

The lengthy list included Temu and another online retailer known for its fast fashion, Shein. 

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