Temu, an online retailer, recently entered into a settlement with the State of Texas to resolve a consumer protection lawsuit brought by Texas Attorney General Ken Paxton, agreeing to change how it handles Texas users’ personal data. The State sued Temu’s operator, Whaleco Inc., and its parent, PDD Holdings Inc., in February 2026 under the Texas Deceptive Trade Practices Act. The privacy claims include allegations that Temu misled consumers about what data its app collects and shares, failed to protect that data, and failed to inform users that their information could reach the Chinese government. Paxton’s office presented the case as keeping Texans’ sensitive data out of the hands of the Chinese Communist Party, noting that Temu had more than 82.4 million active U.S. users as of September 2023. Temu denies any wrongdoing and admits no liability under the settlement.
Under the Agreed Judgment and Permanent Injunction, Temu agreed to pay $3 million to settle the claim. The company also agreed to keep Texas users’ personal data on U.S. servers that are owned and controlled by an American company, and to block persons and entities based in China from accessing that data in readable form, with narrow exceptions. The judgment also requires Temu to, among other things, disclose the categories of personal data that may be shared with third parties outside the United States, designate a U.S.-based compliance officer, and add a one-click account-deletion link to its privacy policy. Independent firms will check Temu’s compliance each year, including testing its app for spyware or undisclosed data collection. Each failed audit that finds material noncompliance carries an $8 million penalty.
The settlement gives Temu up to 180 days to make the main data storage and access changes. Its first annual audit reports are due on the first September 1 that falls at least six months after the judgment takes effect. The judgment will remain in effect for a period of four years.
Ken Paxton AG News Release | Agreed Final Judgment and Permanent Injunction