Lawmaker demands FTC probe Temu parent company over alleged CCP ties
Rep. Brian Mast, R-Fla., urged the FTC to investigate e-commerce site Temu over its alleged CCP ties
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A Republican lawmaker is urging the Federal Trade Commission to probe the China-based parent company of fast fashion retailer Temu over its alleged ties to the Chinese Communist Party.
Rep. Brian Mast, R-Fla., on Tuesday sent a letter to the FTC calling out PDD Holdings Inc. and its subsidiaries, Pinduoduo and Temu, for "harmful business practices here in the United States." The letter urges the FTC to investigate after a pair of class action lawsuits were filed over concerns about the Temu app and data privacy.
"Whether it’s Tiktok or Temu, behind these friendly English words hide three nefarious letters — CCP," Mast told FOX Business in a statement. "We need to be clear, if you’re a company operating within the U.S., you don’t get to hide your links to the Chinese Communist Party. That’s why I’m asking the FTC to probe Temu’s parent company for their links to the CCP and their questionable business practices."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PDD | PDD HOLDINGS INC. | 129.31 | +3.52 | +2.80% |
Temu is an e-commerce site launched in 2022 that offers goods shipped from China at heavily discounted prices. The company made headlines earlier this year with a pair of $7 million Super Bowl ads that encouraged American customers to "shop like a billionaire," which was part of a $3 billion marketing push to compete with U.S. companies like Amazon.
TEMU'S SUPER BOWL ADS SPARK BACKLASH OVER CHINA-BASED FIRM'S FORCED LABOR ALLEGATIONS
A mobile phone displays the Temu APP interface in Shenzhen, Guangdong Province, China, Oct 28, 2022. Temu, a cross-border e-commerce platform of Pinduoduo, was launched in the United States, Hong Kong, Singapore, Taiwan, Canada and other overseas mar (CFOTO/Future Publishing via Getty Images / Getty Images)
The ads prompted several members of Congress to call out Temu’s data practices and links to forced labor in China.
Mast's letter cites a pair of class-action lawsuits in Illinois and New York that allege the company deceptively collected customer data through permissions that allowed it to access Bluetooth and Wi-Fi network information as well as biometric data, and that it failed to adequately safeguard that data.
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Rep. Brian Mast, R-Fla., takes his seat for the House Foreign Affairs Committee hearing on Thursday, March 23, 2023. Mast on Tuesday sent a letter to the FTC urging the commission to probe e-commerce site Temu's alleged ties to the Chinese Communist (Bill Clark/CQ-Roll Call, Inc via Getty Images / Getty Images)
He urges the FTC to question Temu about any financial benefits the company has received from the CCP to subsidize its marketing efforts in the U.S. and to raise questions about how the company handles data security.
Temu did not immediately respond to a request for comment. The company has previously denied that it failed to properly secure customer data in response to the lawsuits.
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The Temu website arranged in Hong Kong, China, on Thursday, Nov. 3, 2022. (Photographer: Lam Yik/Bloomberg via Getty Images / Getty Images)
The House Select Committee on the Strategic Competition between the U.S. and the Chinese Communist Party has investigated links between Temu and Shein, another China-based e-commerce platform, and products made with forced labor from Uyghurs and other persecuted ethnic minorities in China's Xinjiang province.
In June 2023, the committee released an interim report that found that Temu and Shein have exploited U.S. de minimis provisions to evade customs enforcement. De minimis rules allow nearly all of their products valued under $800 to enter the U.S. uninspected and free from duties that most American clothing brands pay. It also found that Temu lacks a system for ensuring compliance with the Uyghur Forced Labor Prevention Act.
The U.S. and several other countries have accused China of committing genocide against the Uyghurs and other Muslim minority groups in Xinjiang. The Chinese Communist Party has engaged in the mass detention of Uyghurs in "reeducation camps" and forced them to work in factories. The CCP denies those allegations, claiming those camps are for "vocational training."
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Mast encourages the FTC to probe Temu's "business nexus" with the Xinjiang province, citing the company's own admission that it "does not expressly prohibit third-party sellers from selling their products based on their origin in the Xinjiang Autonomous Region."
He asks the FTC to refer Temu to the U.S. Department of Homeland Security if the company is found to be in violation of federal law.
Fox Business' Eric Revell contributed to this report.