Editor’s Note: This article has been updated to include a statement from Temu.

On September 5, 2025, the Federal Trade Commission announced its first enforcement case under the INFORM Consumers Act, passed in 2023. The action targeted Temu, the fast-growing online marketplace owned by Whaleco, Inc., for failing to meet core compliance requirements.

According to the FTC, Temu violated the Act by not providing both electronic and telephone mechanisms for consumers to report suspicious activity and by failing to disclose required seller information in listings, including gamified and mobile interfaces. The company agreed to pay a $2 million penalty and implement corrective measures, including clearer disclosure practices, consistent reporting options, and long-term monitoring of compliance obligations.

The settlement also binds Temu to a decade of oversight, with recordkeeping, reporting, and auditing requirements designed to ensure sustained adherence.

Temu provided the following statement in response:

“Throughout the FTC’s investigation, we worked closely with the agency, studied its feedback carefully, and made substantial efforts to address the issues identified. It was a rigorous undertaking, but we believe such scrutiny and dialogue are ultimately constructive for our long-term development. We will continue striving to uphold high standards and to be a responsible corporate citizen in the United States.”

INSIDER TAKE

For subscription executives, the Temu case provides several critical lessons:

1. Enforcement Follows a Cycle
The INFORM Act became law in 2023, but enforcement only arrived in late 2025. Regulators often allow time for compliance build-out and then bring cases against high-visibility players to set precedents. Subscription businesses should not mistake early silence for lack of enforcement.

2. Transparency Is Expanding as a Standard
The FTC’s focus on Temu’s disclosure failures parallels subscription-specific requirements for pricing, renewal terms, and cancellation clarity. Companies must ensure that all consumer touchpoints—from websites to apps to gamified offers—meet the same standard of transparency.

3. Accessibility of Consumer Reporting Is Key
Temu’s failure to offer both phone and electronic reporting was central to the case. Subscription businesses should review whether their own complaint and cancellation mechanisms are equally accessible and easy to find.

4. Creative UX Is No Excuse
Gamified or mobile interfaces do not exempt companies from compliance. If your subscription promotions rely on interactivity or layered offers, disclosures must remain clear and prominent.

5. Long-Term Compliance Obligations Are the Norm
The Temu order includes ten years of monitoring and reporting. Subscription companies should be prepared for regulatory oversight that extends well beyond initial settlements.

6. A Roadmap for Click-to-Cancel
Perhaps most importantly, this case mirrors the FTC’s Click-to-Cancel rule, finalized in 2024 but now vacated after legal challenges. Both INFORM and Click-to-Cancel center on accessibility and transparency: INFORM requires simple reporting options for marketplace consumers, while Click-to-Cancel would require easy exits for subscribers. The FTC’s willingness to pursue enforcement under INFORM shows that when subscription-specific rules return—as they likely will—similar penalties and oversight will follow.

Bottom Line: The FTC’s action against Temu is more than a marketplace issue. It signals an active enforcement environment where transparency and accessible consumer protections are front and center. Subscription executives should treat this as a timely warning to review and strengthen compliance programs before regulators turn their attention back to subscription flows.