Temu Settles Texas Lawsuit With $3 Million and New Data Rules

Ken Paxton announced this week that Temu will pay Texas $3 million and accept new data and product-safety rules to settle a suit filed February 19, 2026 against PDD Holdings and Whaleco. The settlement resolves the case without trial or adjudication. Payment is due within 30 days after the judgment takes effect. Texans' personal data must sit on U.S.-based servers controlled by American entities, with access from China limited to specified business needs such as fulfilling orders. Temu must name a U.S.-based compliance officer, disclose categories of data shared outside the U.S., put a one-click account-deletion link in its U.S. privacy policy, and identify inactive Texas accounts quarterly for deletion after 24 consecutive months of inactivity. Independent annual cybersecurity and product-safety audits are required. Material failures in app-security or data-access audits, and separately in the sensitive-data protections audit, each carry an $8 million penalty, with 60 days to correct material noncompliance. Paxton called the outcome "a historic victory for data privacy, consumer protection, and Texans who deserve to know products are safe." Contested: the record holds only Paxton's framing; it shows no left-rated coverage of the deal. Next is compliance with the storage, audit, officer, and disclosure terms.