Earlier this month, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) together announced a settlement with Whaleco, Inc., the operator of Temu, over allegations that the online marketplace violated the INFORM Act. According to the complaint, Temu failed to provide consumers with required information about sellers or reporting tools to help consumers identify and avoid potentially fraudulent or unsafe products. Under the settlement, Temu will pay $2 million in civil penalties and must put measures in place to bring its practices in line with the law.

The INFORM Act requires online marketplaces to include a mechanism for consumers to report suspicious activity on listings from high-volume third-party sellers. Among other requirements, it obligates platforms to disclose identifying information for these sellers, including the name of the seller, physical address, and contact information, so consumers can reach them directly.

While the INFORM Act took effect in June 2023, this settlement marks the first enforcement of the law.  Continue Reading The INFORM Act in Action: First Enforcement Signals the Stakes