Regulator initiates investigation into Temu in China for unfair business practices

The South Korean antitrust regulator has initiated an inspection into China’s Temu shopping app due to suspicions of false advertising and unfair business practices. The Fair Trade Commission (FTC) has sent documents to Temu for a probe to see if it violates e-commerce acts and advertisement regulations.

Temu’s South Korean subsidiary, Whaleco Korea LLC, has not fully operated since its establishment in February. The regulator is investigating if Temu fulfills responsibilities to protect consumers, as complaints about poor product quality and delivery issues have been increasing.

Furthermore, Temu has faced criticism for using cash coupons and multi-level marketing strategies to attract more customers since entering the South Korean market in July last year. The FTC has not confirmed any ongoing probe into the Chinese platform but vows to respond sternly to any violations.

The inspection into Temu by South Korea’s antitrust regulator highlights concerns about false advertising and unfair business practices in the e-commerce sector. With complaints on the rise regarding product quality and delivery issues, it remains to be seen how Temu will address these allegations.