The Justice Department, together with the Federal Trade Commission (FTC), announced Monday that a federal court has entered a stipulated order resolving a case against Whaleco Inc., doing business as ‘Temu’.
Under the order, Temu will pay $2 million in civil penalties as part of a settlement to resolve allegations that it violated the INFORM Consumers Act in connection with its online marketplace.
The INFORM Consumers Act requires that online marketplaces clearly and conspicuously disclose identifying information about high-volume sellers on their platforms and provide mechanisms for consumers to electronically and telephonically report suspicious activity to the marketplace.
In a complaint filed in the U.S. District Court for the District of Massachusetts, the government alleged that Temu failed to sufficiently disclose certain information for high-volume third-party sellers, such as seller addresses, and Temu did not consistently provide the reporting mechanisms required by law.
“The Justice Department is committed to ensuring American consumers have information about third-party sellers online and mechanisms to report suspicious marketplace behaviour,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Department will continue to ensure that online marketplaces follow the INFORM Consumers Act.”
In addition to imposing a $2 million civil penalty on Temu, the stipulated order requires Temu to put measures in place to ensure compliance with the INFORM Consumers Act going forward.
