Temu settles Texas lawsuit, agrees to keep user data on U.S. servers and boost product safety

Texas concluded a lawsuit against Temu by securing a deal that mandates the e-commerce platform to keep all U.S. consumer data on domestic servers and restrict any cross-border access to China to only what is needed for order fulfillment. The state also secured a commitment for annual independent testing of products for dangerous chemicals, with requirements to pull any unsafe items, shut down the responsible sellers, inform impacted customers and issue refunds.

As part of the accord, Temu will pay $3 million to Texas, and each breach of the data-security provisions could incur an $8 million penalty per violation. The Texas Attorney General highlighted the new product audits and safety standards aimed at protecting consumers, especially for clothing and children’s goods. Temu, which serves over 82.4 million U.S. users, denied the allegations but said it would comply with the agreement while continuing to serve Texas shoppers. The settlement marks the first resolution of similar claims filed by other states over Temu’s data-collection practices.