You know the saying that when a store’s prices are unbeatable, they’re likely unbelievable?
That’s the same warning Arkansas’ attorney general is giving to Americans who shop on Chinese-based Temu, alleging "it’s a theft business."
"The threat from China is not new, and it is real," AG Jim Griffin said on "Varney & Co." Tuesday. "Temu is not an online marketplace like Amazon or Walmart. It's a data theft business that sells goods as a means to an end. So it is common for an online marketplace like Amazon, like Walmart, to collect certain consumer data as part of the normal course of business. I think we all know that that's not what's going on here."
Last week, Griffin took legal action against the Chinese fast-fashion retailer Temu over what he alleges are the company’s "deceptive tactics" that are harming consumers.
AMAZON LAUNCHING SHEIN, TEMU COMPETITOR WITH DIRECT SHIPPING FROM CHINA
Arkansas' lawsuit targets Temu’s parent company, PDD Holdings. Shaun Rein, founder of the China Market Research Group, has described PDD Holdings as a "monster in Chinese e-commerce."
Griffin alleged that the company is using spyware and malware on its app to get more than just Americans’ consumer data.
"What Temu is doing is selling goods at a rock bottom price, not to make a profit off of those, but as a way to get into your phone, your device, and to collect your data," Griffin said. "Not just traditional consumer data, but using malware spyware to have complete access to your information. And [taking it] one step further, their code is written in such a way to evade detection."
These actions violate "several" of Arkansas’ state laws, according to the attorney general.
"We've got a violation of the Arkansas Personal Information Protection Act, and we have a violation of the Arkansas Deceptive Trade Practices Act," he noted.
"All of this against the backdrop of who owns the company, who operates the company, which are former Chinese communist officials," Griffin continued. "So there's a lot to unpack here that goes beyond a traditional online marketplace."
A spokesperson for Temu reportedly told FOX Business the company was "surprised and disappointed" by the lawsuit. The company accused the attorney general of filing the lawsuit "without any independent fact-finding."
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"The allegations in the lawsuit are based on misinformation circulated online, primarily from a short-seller, and are totally unfounded. We categorically deny the allegations and will vigorously defend ourselves," the Temu spokesperson said.
Temu rose to household fame after spending nearly $3 billion on multiple Super Bowl ads in February, which cost roughly $7 million each – the going rate for 30-second ads during this year’s big game.
FOX Business’ Bradford Betz contributed to this report.
