Record Fine Under Digital Services Act
The European Commission has imposed a record fine of €550 million (£470 million) on AliExpress, the Chinese online retail platform, for failing to prevent the sale of illegal and harmful goods through its site. This is the largest penalty issued under the Digital Services Act (DSA), legislation designed to protect consumers from illegal products and deceptive marketing.
Details of the Violations
The Commission found that AliExpress lacked sufficient staff to assess product legality, often giving employees only tens of seconds to evaluate whether items met EU standards. Many illegal products, including counterfeit clothing, unsafe toys, and dangerous cosmetics, were promoted via the platform's recommendation systems and remained online for weeks even after detection. Internal risk assessments were also deemed inadequate.
Henna Virkkunen, the Commission's executive vice-president for tech sovereignty, security and democracy, stated: "The spread of counterfeit clothing, unsafe toys, dangerous cosmetics and other illegal and harmful products is not an unavoidable cost of shopping online – it is a failure by AliExpress to comply with its obligations under the Digital Services Act. Scale is not an excuse; risks must be identified and addressed systematically to ensure consumers can safely shop online."
Comparison with Previous Fines
The €550 million fine surpasses previous DSA penalties, including €200 million against Temu and €120 million against X. However, it represents less than 1% of AliExpress parent company Alibaba's €122 billion annual revenue. The maximum possible fine was 6% of global annual revenue. Temu remains under investigation for other issues and may face additional fines.
AliExpress Response and Appeal
AliExpress immediately condemned the fine as "disproportionate" and announced plans to appeal. The company stated: "We disagree with today’s decision and the disproportionate fine, which does not adequately reflect our established framework and the significant, proactive enhancements we have made." The Commission noted that AliExpress was given over two years to rectify compliance issues but failed to do so.
Impact on Consumers and Market
The Commission's investigation found that AliExpress's terms and conditions appeared compliant, but sellers could easily list non-compliant goods. Millions of products flagged as illegal reappeared online, sometimes staying for over a month. The platform's 193 million users make it the largest Chinese online retailer in the EU, ahead of Shein (156 million) and Temu (130 million). Previous EU tests on large platforms found 65% of cosmetics, 63% of food supplements, and 60% of personal protection equipment non-compliant.
