AliExpress Fined Record €550 Million by EU for Selling Illegal Products
European Commission cites sale of unsafe toys and counterfeit goods, marking largest penalty under Digital Services Act.
Chinese online retailer AliExpress has been fined a record €550 million (£467 million) by the European Union for failing to prevent the sale of illegal products, including unsafe toys and counterfeit clothing, on its platform. The penalty is the largest imposed under the Digital Services Act (DSA), a regulation requiring major online platforms to increase efforts to combat illegal and harmful content.
The European Commission stated that AliExpress did not adequately assess the risks associated with illegal, unsafe, or counterfeit goods being offered by sellers on its site. An investigation spanning two years found that the platform's detection systems were ineffective, often failing to flag illicit items or leaving them accessible for extended periods.
The commission also found that AliExpress did not consistently enforce penalties against traders selling prohibited items and that its product compliance checks could be easily bypassed. AliExpress, owned by the Chinese conglomerate Alibaba, has 193 million users in Europe, exceeding the user numbers of fellow Chinese online retailers Shein and Temu.
This marks the third significant fine issued under the DSA. Previously, Temu received a €200 million fine for similar violations related to the sale of dangerous products, and Elon Musk's X was fined €120 million for deceptive practices concerning paid verification badges. Shein is also currently under investigation by the EU.
While the DSA allows for fines up to 6% of a company's global revenue, Alibaba's reported global turnover of €122 billion last year means the €550 million penalty falls considerably short of the maximum potential fine. Henna Virkkunen, executive vice president for tech sovereignty, security, and democracy at the commission, emphasized that "scale is not an excuse" for the presence of dangerous or illegal goods, stating that their proliferation signifies a failure by AliExpress to meet its legal obligations.
In response, AliExpress stated that it disagrees with the decision and the fine, calling it disproportionate and not reflective of the enhancements the company has made. The company is reviewing the decision and considering its options. AliExpress must pay the fine and present a plan to the EU by October 20 outlining its measures to address the breaches.