The Biden Federal Trade Commission (FTC) reportedly communicated with a major Chinese e-commerce company about Amazon’s pricing policies that are related to the FTC’s case against Amazon, according to The Information, citing two people familiar with the matter.
FTC personnel reportedly sent a letter to Temu and also spoke with representatives of the company between December 2024 and Inauguration Day, according to The Information and Daniel J. Gilman, a former FTC attorney advisor and current senior scholar for the International Center for Law and Economics. Amazon’s pricing practices are at the center of a Biden FTC antitrust case against the company, which alleges Amazon pricing practices limit consumer choice to the disadvantage of competitors, and that company policy disadvantages third-party sellers using their infrastructure.
“The internet is now abuzz with reports of even more curious behavior from the commission—namely, that the FTC has been building its antitrust case against Amazon on the strength of testimony from Temu, a Chinese online marketplace that connects customers directly with manufacturers in China and that competes directly with Amazon,” Gilman wrote on Tuesday in his piece for Truth on the Market. “It’s a dubious case, and new FTC leadership ought to take a good hard look at the details, and at the question of whether this specific antitrust case is a sensible way to deploy FTC resources.”
‘Radical And Partisan’: Republican Concern Is Growing Over Lina Khan’s FTC Overhaul https://t.co/Z89qxlphKI
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Temu was famously featured as a prominent television advertiser to American audiences during the Super Bowl in February 2024, and the company has emerged as a major global player in the e-commerce space. However, Diane Rinaldo — a resident senior associate at the Center for Strategic and International Studies — described Temu as “an information-gathering spyware program masquerading as an e-commerce site” in an October 2024 report.
Rinaldo argued that Temu’s underlying code makes it a prime data collection tool that can prove difficult to remove entirely from users’ devices, which is troubling in light of Chinese law that requires corporations to cooperate with Chinese state security services.
“Were the app’s invasiveness the end of the story, it would be concerning enough, but given that Temu has existing relationships with arms of the [Chinese Communist Party (CCP)] involved in data oversight, control, and propaganda and is obligated to cooperate — under China’s National Intelligence Law — with CCP authorities, it is worth far more scrutiny than it currently receives,” Rinaldo wrote. “Temu, with its access to user devices, is an exceptionally powerful vehicle for covert surveillance and, potentially, a tool for distributed denial-of-service attacks. Indeed, the app and its parent company should be seen as a demonstrable front in strategic competition with China.”
Moreover, there is some concern among elected officials that Temu may not be in full compliance with the Uyghur Forced Labor Production Act (UFLPA), a law meant to keep products linked to Uyghur Muslim slave labor in China from penetrating U.S. markets.
“Temu’s business model, which relies on the de minimis provision, is to avoid bearing responsibility for compliance with the UFLPA and other prohibitions on forced labor while relying on tens of thousands of Chinese suppliers to ship goods direct to U.S. consumers,” reads a June 2023 interim findings report from the House Select Committee on the CCP. “Temu conducts no audits and reports no compliance system to affirmatively examine and ensure compliance with the UFLPA. The only measure Temu reported that it takes to ensure that it is not shipping goods to Americans that are produced with forced labor in violation of U.S. law was that its suppliers agree to boilerplate terms and conditions that prohibit the use of forced labor.”
“Temu admitted that it ‘does not expressly prohibit third-party sellers from selling products based on their origin in the Xinjiang Autonomous Region,’” the committee’s report adds.
The Biden FTC was generally hostile to American technology companies under the leadership of former FTC Chair Lina Khan, taking action against Meta in addition to Amazon. Khan stepped down from her post just ahead of Inauguration Day, and she has been replaced by current FTC Chair Andrew Ferguson.
The FTC declined to comment. Amazon and Temu did not respond to requests for comment.
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