Sept. 8 (UPI) — Whaleco Inc., operating as Temu, has been ordered by a federal court to pay a $2 million civil fine for violating federal law regarding its online marketplace, the U.S. Department of Justice said Monday.

The private U.S.-registered company, which mainly sells products from China, had the most downloaded app in the United States in 2024, according to Business of Apps. The company also sells products to customers in 90 countries.

DOJ and the Federal Trade Commission filed a complaint in the U.S. District Court of Massachusetts alleging Temu didn’t sufficiently disclose certain information for high-volume third-party sellers, including addresses, or provide consistent reporting methods as required by law. This included consumers’ ability to electronically and telephonically report suspicious activity to the marketplace.

The agencies said they violated the INFORM Consumers Act.

“The Justice Department is committed to ensuring American consumers have information about third-party sellers online and mechanisms to report suspicious marketplace behavior,” Assistant Attorney General Brett A. Shumate of DOJ’s Civil Division said in a statement. “The Department will continue to ensure that online marketplaces follow the INFORM Consumers Act.”

Temu also was ordered to ensure compliance with the INFORM Consumers Act in the future.

Temu, which means “Team Up, Price Down,” was founded as Whaleco Inc. in Boston in 2022.

It is a subsidiary of PDD Holdings, a Chinese online retailer owned by Colin Huang. PDD Holdings also owns Pinduoduo, an online commerce platform in China.

In July, the European Commission charged Temu with breaking the EU’s Digital Services Act by failing to prevent the sale of usnafe products that violate its standards.

In an analysis, the European Commission found that shopping on Temu carries a high risk of finding unsafe products, such as small toys and small electronics.

In the EU, companies can be fined up to 6% of their annual total worldwide turnover.

Temu, with an estimated annual revenue of $53.9 billion in 2024, competes with Amazon, the No. 1 online retailer in the world with $391.4 billion in revenue last year.

“Temu is committed to bringing affordable products onto its platform to enable consumers and merchandise partners to fulfill their dreams in an inclusive environment,” the company said on its website.

Temu and another online retailer, Shein, have been hit by tariffs imposed on imports into the United States.

“Due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustment starting April 25, 2025,” Temu said in a statement to U.S. shoppers.

That was in late April when there was a 145% duty on Chinese imports. The Trump administration has since lowered them temporarily to 10%. The pause is until Nov. 10.