Texas Attorney General Ken Paxton filed a lawsuit against Temu (PDD Holdings, Inc. and WhaleCo Inc.) for deceptive marketing practices and illegally harvesting Texans' personal data, which was then exposed to the Chinese Communist Party. The suit seeks monetary damages under the Texas Deceptive Trade Practices Act, with potential penalties of up to $10,000 per violation and higher for seniors. This is part of a broader effort to hold CCP-aligned companies accountable.
The lawsuit seeks monetary damages under the DTPA, with penalties of up to $10,000 per violation and up to $250,000 per violation for violations targeting consumers aged 65 or older.
In-house legal teams should review all vendor, customer, and data processing agreements, particularly those involving data collection, marketing services, and international data transfers. Key clauses to scrutinize include data processing and sharing provisions, consumer consent mechanisms (especially for sensitive data), marketing and advertising representations, data security and breach notification requirements, data retention schedules, and cross-border data transfer mechanisms. Given the allegations of illegal harvesting and exposure to foreign entities, contracts may need amendments to mandate explicit, granular consent for data collection; prohibit transfers to jurisdictions without adequate safeguards (e.g., China); require robust security audits; implement clear opt-out mechanisms; and ensure all marketing claims are verifiable and non-deceptive to comply with the Texas Deceptive Trade Practices Act.
Entity
PDD Holdings, Inc. and WhaleCo Inc.
Also known as: Temu
Industry
TechnologyOfficial Press Release
https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-files-fourth-anti-ccp-lawsuit-three-days-suing-temu-deceptive-marketing
Petition 12
https://www.texasattorneygeneral.gov/sites/default/files/images/press/Petition_12.pdf
Texas Attorney General Enforcement Page
https://www.texasattorneygeneral.gov/consumer-protection/privacy
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