South Korea Investigates China's Temu for Alleged False Advertising

South Korea's antitrust regulator, the Fair Trade Commission (FTC), has initiated an inspection into the operations of China's Temu shopping app amid allegations regarding the retailer's advertising tactics and potentially unfair business practices. This move spotlights Temu as officials express concerns over its adherence to South Korea's e-commerce and advertising regulations.

Investigations Underway

Recent actions by the FTC have included sending inquiry documents to Temu to determine if the platform has engaged in false and exaggerated advertising, violating key commerce legislation. This inquiry is particularly significant as it unfolds while Temu's South Korean subsidiary, Whaleco Korea LLC, established in February, is still gearing up for full-scale operations.

According to Korea Bizwire, the focus of the regulator's probe extends to consumer protection, as the number of complaints against Temu has seen an uptick, with many grievances highlighting issues with product quality and the timeliness of deliveries. Adding to the controversy, Temu has been scrutinized for its promotional strategies—specifically, the use of cash coupons and multi-level marketing tactics as it seeks more excellent traction in the fiercely competitive South Korean market since its entry in July of the previous year.

Regulatory Silence and Broader Privacy Concerns

Yonhap News Agency noted that while the FTC has stopped short of confirming the ongoing investigation into Temu, it has nonetheless promised a rigorous response to any discovered infractions. This development comes as concerns mount over the way Chinese e-commerce entities, like Temu and AliExpress, manage and utilize consumer data. Ko Hak-soo, chairperson of the Personal Information Protection Commission, disclosed that an examination into the data practices of these companies is in progress, highlighting a growing unease over the security of personal information within such platforms.

The outcome of these investigations may significantly influence the operational landscape for foreign e-commerce firms in South Korea, underscoring the country's commitment to fair trade practices and consumer protection in the digital age.

Photo: Temu Newsroom