Attorney General Ashley Moody, along with 20 other state Attorneys General, launched an investigation into Temu and its parent company, PDD Holdings, focusing on potential legal and ethical violations.

Attorney General Ashley Moody, in collaboration with 20 other state Attorneys General, initiated an inquiry on Friday into the business practices of Temu and its parent company, PDD Holdings.

The probe, formalized in a letter sent to the leadership of both companies, raises concerns regarding potential ethical and legal violations, particularly regarding alleged connections to the Chinese Communist Party (CCP) and the use of forced labor in Xinjiang, China.

The inquiry is predicated on recent findings by the United States House Select Committee on the Chinese Communist Party, which indicated that Temu, an e-commerce platform, has been failing to comply with U.S. laws prohibiting the importation of goods made with forced labor. The Select Committee’s report suggested that Temu does not have adequate policies in place to prevent the sale of products from Xinjiang, a region where the CCP has been accused of committing genocide against the Uyghur population. Moreover, the company has been criticized for its lack of a compliance system, which reportedly relies on Chinese suppliers to voluntarily report any violations.

“Congressional investigators believe that your company, Temu (which is owned by PDD Holdings), is illegally selling products made by forced labor in an area of China in which the CCP is committing genocide,” the Attorneys General wrote.

Moody and her counterparts also expressed concern regarding Temu’s potential non-compliance with state consumer protection laws. The outlined concerns include the sale of products that allegedly do not meet safety standards and the company’s failure to adequately inform consumers of product recalls. The letter references specific incidents, such as the recall of children’s pajama sets and bike helmets sold exclusively on Temu’s platform, which were found to violate federal safety regulations.

“This conduct is deeply troubling in its own right. But beyond the concerns raised by Temu’s likely (and extensive) violations of federal law, this ongoing conduct raises serious concerns about Temu’s compliance with state consumer protection laws,” the letter continued.

Montana Attorney General Austin Knudsen presented additional worries about the potential for Temu to share consumer data with the CCP, a concern heightened by the impending implementation of Montana’s Consumer Data Privacy Act. The law, which takes effect on October 1, 2024, imposes regulations on how companies collect and handle consumer data.

Concluding the letter, the Attorneys General have posed a series of detailed questions to Temu and PDD Holdings, seeking clarification on their data collection practices, measures to prevent the use of forced labor, and compliance with U.S. consumer protection laws. The companies have been given 30 days to respond to these inquiries, including providing any supporting documentation.