In a major move to protect online shoppers, the Justice Department and the Federal Trade Commission (FTC) announced that federal authorities have reached a settlement with Whaleco Inc., the company behind the popular online marketplace Temu.
As part of the agreement, Temu will pay $2 million in civil penalties to resolve claims that it violated the INFORM Consumers Act.
What the INFORM Consumers Act Requires
The INFORM Consumers Act is designed to make online shopping safer by ensuring that marketplaces provide clear information about high-volume sellers.
It also requires platforms to give consumers easy ways—both online and by phone—to report suspicious activity.
According to the government, Temu fell short in both areas.
The complaint filed in the U.S. District Court for the District of Massachusetts highlighted that Temu didn’t consistently provide key details about sellers, like addresses, and failed to maintain proper reporting mechanisms for consumer concerns.
Justice Department’s Stance on Consumer Protection
“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 enforce the INFORM Consumers Act to hold online marketplaces accountable.
Steps Temu Must Take
Beyond the $2 million penalty, the settlement requires Temu to adopt measures that will ensure full compliance with the law going forward.
This means improving transparency for high-volume sellers and making it easier for consumers to report suspicious activity—essentially making the platform safer and more trustworthy for shoppers.
Legal Team Behind the Action
The United States was represented in this case by Senior Trial Attorney Sarah Williams and Assistant Director Zachary A.
Dietert of the Civil Division’s Consumer Protection Branch, with assistance from Assistant U.S. Attorney Alexandra Brazier in Massachusetts.
The FTC was represented by Tiffany M. Woo and Carl Settlemyer.
Learn More About Consumer Protection
For shoppers and businesses who want to understand more about the Consumer Protection Branch and its enforcement efforts, detailed information is available at www.justice.gov/civil/consumer-protection-branch.
This case highlights the continued effort of federal authorities to ensure transparency and accountability in the growing online marketplace world.