Federal regulators say the online marketplace failed to provide clear reporting tools and seller information required by law.
The Federal Trade Commission (FTC) announced that Whaleco, Inc., operator of Temu, has agreed to pay $2 million to settle allegations that it violated the Integrity, Notification, and Fairness in Online Retail Marketplaces (INFORM) Consumers Act of 2023. The agency alleged that Temu did not provide consumers with required reporting mechanisms for fake or unsafe products and had not disclosed seller information, especially in its “gamified” shopping features.
“The INFORM Act is designed to ensure consumers have the information and tools they need to not only report suspicious activity to online marketplaces, but to directly identify and contact high-volume, third party sellers in many cases,” said FTC’s Bureau of Consumer Protection Director Christopher Mufarrige. “Temu, one of the most recognizable online marketplaces, is responsible for complying with the Act. [This] action serves as a reminder to online marketplaces that violating the INFORM Act can result in serious consequences, including civil penalties.”
If approved by a federal court in Massachusetts, the settlement will require Temu to establish easier-to-use reporting systems, provide clear and conspicuous seller disclosures across its platforms, and maintain compliance with INFORM Act requirements. This case marks the FTC’s first enforcement action under the 2023 law. The Department of Justice, acting on the FTC’s referral, filed the complaint and proposed consent decree in district court.
As the Lord Leads, Pray with Us…
- For Director Mufarrige to be led by the Lord as he heads the Bureau of Consumer Protection.
- For Chair Ferguson and members of the FTC as they seek to ensure online retailers comply with federal laws.
Sources: Federal Trade Commission, Consumer Affairs
