Executive Summary: Key Legal and Evidentiary Issues

• Multi-jurisdictional class action coordination between Québec, British Columbia, and several U.S. federal proceedings concerning the Temu platform
• Allegations that Temu’s operators exfiltrate and exploit user and non-user data far beyond what is necessary for an online shopping application
• Central role of arbitration clauses and delegation provisions in Temu’s Terms of Use in determining forum, procedure, and access to court
• Impact of U.S. arbitration outcomes on the strategic choice of Canadian forum (Québec vs British Columbia) and on the viability of the Canadian class claims
• Case management considerations around a temporary stay to promote proportionality, judicial economy, and avoidance of inconsistent decisions
• Agreement of the parties to a one-year stay, with a duty to report material developments in related U.S. proceedings, and no legal costs awarded

Background and facts of the case

This matter arises from a proposed class action in the Superior Court of Québec, Class Actions Chambers, brought by applicant Ben Baird against Whaleco Canada Inc. and Whaleco Inc., both doing business as Temu, as well as PDD Holdings Inc., formerly known as Pinduoduo Inc. The proceeding targets the activities of the Temu online shopping platform. The Québec application, filed on March 22, 2024, seeks authorization to institute a class action on behalf of all persons resident in Québec who used the Temu platform, had electronic communications with Temu users, or had their data stored on devices used by Temu users, with the possibility of further groups to be defined by the Court. Parallel litigation has been commenced elsewhere in Canada. On October 1, 2024, a similar class action was filed in the Supreme Court of British Columbia (Steeves v. Whaleco Canada Inc.) on behalf of residents in Canada, excluding Québec, who used Temu, had electronic communications with Temu users, or had their data stored on devices used on Temu, again with flexibility for the Court to adjust the group description. In addition, several related proceedings have been launched in the United States, primarily in the U.S. District Court for the Eastern District of New York, some transferred from other states such as Illinois and California. These include the Hu, Ziboukh, McMahan, Potter Handy Data Privacy, and In re Whaleco Privacy Litigation matters. Together, these cases form a broader international litigation landscape concerning Temu’s data-handling practices.

Allegations and nature of the claims

At the core of the Québec proposed class action are allegations that the defendants have been and continue to collect, compile, store, and/or disseminate user data far beyond what is necessary for a typical online shopping application such as Temu. The applicant alleges the deployment of a sophisticated arsenal of digital tools that exfiltrate the totality of private data contained on a user’s device. The class definition extends beyond direct users of the Temu platform to persons who merely have electronic communications with Temu users or whose data is stored on devices used by Temu users, reflecting the concern that Temu’s alleged data harvesting might affect both users and non-users. These claims sit at the intersection of privacy, consumer protection, and technology law, and are structured as class proceedings to address systemic practices rather than isolated incidents. Although the judgment under review does not resolve the merits of these allegations, it describes them sufficiently to show that the case will likely turn on evidence about the technical functioning of the Temu app, the scope and nature of data collection, and the relationship between those activities and the expectations of consumers and non-users.

Parallel U.S. litigation and the role of arbitration provisions

The judgment emphasizes that comparable actions were filed in the United States between late 2023 and early 2025 and that five related cases are now pending or have been processed in the Eastern District of New York. A key theme running through those U.S. proceedings is the enforceability and scope of arbitration provisions in Temu’s Terms of Use, including a delegation clause and an informal dispute resolution conference requirement. In the Hu action, the court granted the defendants’ motion to compel arbitration and stayed the court proceeding pending the outcome of arbitration. In the Ziboukh action, an August 14, 2025 decision ordered that users’ claims be referred to arbitration while non-users’ claims were dismissed without prejudice for lack of standing; the parties later filed a joint stipulation to dismiss with prejudice, and no renewed claim on behalf of non-users has been filed. Subsequent developments saw the parties in the Potter Handy Data Privacy Action and In re Whaleco Privacy Litigation agree to proceed to arbitration. In the McMahan action, a March 9, 2026 decision compelled arbitration for five plaintiffs’ claims and dismissed the remaining plaintiffs’ claims that had failed to follow the mandatory procedural steps in the arbitration agreement. By the time of the Québec decision, all U.S. cases concerning the Temu data privacy issues had effectively been referred to arbitration, leaving the B.C. action ongoing.

Canadian forum considerations and coordination strategy

Within this context, the parties to the Québec class action discussed proceeding in only one Canadian jurisdiction—either Québec or British Columbia—for reasons of judicial efficiency and consistency. However, they wished to wait and see how the U.S. arbitrations unfolded before formally requesting that the case advance in either Québec or B.C. The idea was that arbitral outcomes in the U.S. could inform whether, where, and how to pursue the Canadian class claims, including whether the arbitration clauses in Temu’s Terms of Use would be applied in Canada, and to what extent. The Court notes that a temporary one-year stay of the Québec proceedings would allow the U.S. cases to progress and give the plaintiff time to decide where best to litigate the issues in Canada and to assess the overall merits of the case. At the same time, the Court recognizes that the proposed stay serves broader objectives of judicial proportionality and economy. It cautions, however, that if no tangible result is achieved in the U.S. during the stay period, the parties must be prepared either to debate the application of Temu’s arbitration clause in Canada or to move forward with the Québec proceeding. The defendants do not oppose the temporary stay, and the parties undertake to keep the Québec Court advised of any material developments in the U.S. cases while the stay is in place.

Policy terms and arbitration clause considerations

Although the Québec judgment does not quote the precise wording of Temu’s Terms of Use or specific arbitration clauses, it makes clear that these contractual provisions are central to the cross-border litigation strategy. The U.S. cases revolve around arguments that the arbitration agreement in Temu’s Terms of Use, including its delegation clause, governs disputes about the app’s alleged intrusive data collection. Courts there have compelled arbitration, stayed or dismissed court proceedings, and enforced procedural preconditions embedded in the arbitration agreement, such as informal dispute resolution requirements. From a Canadian perspective, the judgment signals that the Québec Court anticipates a potential future argument on whether similar arbitration provisions bind Québec residents, whether they are compatible with Québec’s consumer protection regime and public order, and to what extent they may limit class actions in this context. The one-year stay thus functions as a deliberate pause to observe how those policy terms are interpreted and applied in the U.S., potentially influencing or informing any subsequent analysis in Québec or British Columbia, without at this stage endorsing or rejecting the clauses under Québec law.

The correction judgment and the temporary stay outcome

There are two decisions encompassed in this case. The first is a correction judgment dated April 17, 2026. The Court notes that the original judgment contained an error in the year of the decision and, relying on section 338 of the Code of Civil Procedure, corrects the date so that the judgment is properly dated April 13, 2026, rather than April 13, 2024. This correction is a procedural housekeeping measure only and is made without legal costs. The second and substantive judgment, dated April 13, 2026 (as corrected), is where the Court addresses the parties’ request for a temporary stay. After reviewing the procedural history in Canada and the United States, the nature of the Temu-related allegations, and the status of the U.S. arbitration processes, the Court grants the application for a temporary stay of the proposed class action. It orders that the Québec action be suspended until April 13, 2027 and confirms that the order is made without legal costs. The judgment underscores that during the stay the parties must keep the Court informed of any material U.S. developments. In practical terms, the successful outcome is that the applicant’s motion for a temporary stay—unopposed by the defendants—is granted in full, and the Québec proceeding is paused for one year. However, no damages, compensation, or costs are awarded to any party in either the correction judgment or the stay judgment, so the total monetary award, including legal costs, is zero and cannot be otherwise quantified.