Temu Settles Texas Lawsuit With $3 Million and New Data Rules

Temu has agreed to pay Texas $3 million and change its data and product-safety practices to settle a lawsuit alleging excessive data collection, security risks and misleading consumer practices; the settlement is not an admission of wrongdoing. It requires Texans’ personal data to be stored on U.S.-based servers controlled by American entities and limits access from China to specified business needs, such as fulfilling orders. Temu must undergo independent annual cybersecurity and product-safety audits, and remove unsafe goods, terminate responsible sellers, notify affected customers and issue refunds. Material failures in certain audits can trigger $8 million penalties, with the agreement generally remaining in effect for four years.