Online shopping fans might want to take note: Temu, operated by Whaleco Inc., has agreed to a $2 million settlement following allegations that it failed to meet certain consumer protection requirements.
The announcement came jointly from the Justice Department and the Federal Trade Commission (FTC), highlighting the government’s focus on transparency and safety in online marketplaces.
What Happened
The case centers on the INFORM Consumers Act, a law designed to protect shoppers by requiring online marketplaces to clearly disclose key information about high-volume sellers.
It also mandates that consumers have easy ways to report suspicious activity—either electronically or by phone.
According to the government, Temu fell short in two main areas: it didn’t consistently share certain details about high-volume third-party sellers, such as their addresses, and it didn’t always provide the proper reporting tools for consumers.
The complaint was filed in the U.S. District Court for the District of Massachusetts.
Government Response
“The Justice Department is committed to ensuring American consumers have information about third-party sellers online and mechanisms to report suspicious marketplace behavior,” said Assistant Attorney General Brett A. Shumate of the Civil Division.
He emphasized that the Department will continue to hold online platforms accountable under the INFORM Consumers Act.
What Temu Must Do
As part of the settlement, Temu isn’t just paying a $2 million civil penalty.
The company is also required to implement procedures that guarantee future compliance with the law.
This includes better transparency about sellers and reliable reporting mechanisms for consumers.
Who Represented the U.S.
The United States was represented by Senior Trial Attorney Sarah Williams and Assistant Director Zachary A. Dietert from the Civil Division’s Consumer Protection Branch, along with Assistant U.S. Attorney Alexandra Brazier for the District of Massachusetts.
The FTC was represented by Tiffany M. Woo and Carl Settlemyer.
What’s Next
Temu now faces the task of aligning its marketplace operations with federal standards, while regulators will continue monitoring compliance.
For consumers, this settlement reinforces the expectation that online marketplaces provide clear seller information and accessible reporting tools, making online shopping safer for everyone.