Temu will have to pay $2 million for consumer rights violations

A federal court ordered Whaleco Inc, which operates under the name Temu, to pay a $2 million civil penalty for violating federal law with respect to its online marketplace, the Justice Department said in a statement.

The privately held U.S.-registered company, which primarily sells products from China, had the most downloaded app in the country in 2024, according to Business of Apps. The company also sells products to customers in 90 countries .

The Department of Justice and the Federal Trade Commission filed suit in Massachusetts District Court, alleging that Temu failed to adequately disclose certain information from high-volume third-party sellers, including addresses, or provide consistent reporting methods as required by law.

This included allowing consumers to report suspicious activity to the marketplace electronically and by telephone.

"The Department of Justice is committed to ensuring that U.S. consumers have information about outside online sellers and mechanisms for reporting suspicious marketplace behavior," said Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division.

Shumate assured that the Department will continue to ensure that online marketplaces comply with the INFORM Consumer Act.

Forward-Looking Commitment

In addition to imposing a $2 million civil penalty on Temu, the stipulated order requires Temu to implement measures to ensure compliance with the INFORM Consumer Act in the future.

The government is represented in this action by Senior Trial Attorney Sarah Williams and Deputy Director Zachary A. Dietert of the Civil Division's Consumer Protection Division.