The Chinese online shopping app Temu. (Photo Illustration by Justin Sullivan/Getty Images)
(People News) On Monday (September 8), the U.S. Department of Justice and the Federal Trade Commission (FTC) stated that Whaleco, the operating company of the e-commerce platform Temu, will pay a $2 million civil penalty to settle allegations that it violated the INFORM Consumers Act.
According to Voice of America, the INFORM Consumers Act requires online marketplaces to disclose the identity information of high-volume third-party sellers and provide consumers with clear electronic and telephone mechanisms to report suspicious activity.
According to documents submitted by the government, Temu failed to make the required disclosures for some sellers and did not consistently provide the reporting tools mandated by law. The complaint also stated that Temu’s “gamified” shopping function did not add a reporting mechanism until the end of 2024, and even when it did, the mechanism was not clear and prominent as required by law.
Brett A. Shumate, Assistant Attorney General for the Civil Division of the Department of Justice, stated that the DOJ is committed to ensuring that U.S. consumers can access seller information and use reporting tools: “The Department of Justice will continue to ensure that online marketplaces comply with the INFORM Consumers Act.”
Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, stated that this case “reminds online marketplaces that violating the INFORM Consumers Act may lead to serious consequences, including civil penalties.”
According to the court order, Temu must adopt compliance measures to ensure that its online marketplace—including its website, mobile, and app—provides clear disclosures and effective reporting mechanisms.
In 2024, Temu was the most downloaded app in the United States, with operations spanning more than 90 countries. The company is owned by China-based parent company PDD Holdings, which in recent years has come under regulatory scrutiny in the U.S. and Europe over consumer safety and compliance issues. △
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