The European Commission has imposed a record fine of €550 million (£470 million) on Chinese online retail platform AliExpress for failing to prevent the sale of illegal goods, including harmful clothing, cosmetics, and kitchen gadgets. This penalty is the largest ever under the Digital Services Act (DSA), which aims to protect consumers from illegal products and deceptive marketing.
EU Executive Vice President Condemns AliExpress
Henna Virkkunen, the European 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. Today, we are holding AliExpress to this standard and request it to take action.”
Comparison with Previous Fines
The €550 million fine far exceeds previous DSA penalties, such as €200 million against Temu and €120 million against X (formerly Twitter). However, it represents less than 1% of AliExpress parent company Alibaba’s €122 billion annual revenue. The maximum possible fine could have been 6% of global annual revenue. Temu was fined in May for similar issues and remains under EU investigation, while X was penalized for deceptive verification badges and advertising transparency.
Findings of the Investigation
The European 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 were promoted through AliExpress’s recommendation systems, and internal risk assessments were inadequate. “Many illegal products, from counterfeit products to unsafe toys and dangerous cosmetics, circulated on the platform and, even if detected, remained online for multiple weeks,” the commission said. A senior official added that the fine reflected “the nature and gravity” of the platform’s failure to implement mitigating measures.
AliExpress Responds and Plans Appeal
AliExpress immediately condemned the fine as “disproportionate,” stating: “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 company announced it would “appeal the decision,” claiming the fine “ignores our sound risk management framework and the significant, proactive enhancements we have made.”
Broader Context of Non-Compliance
Previous EU investigations of products on large retail platforms like Shein found high rates of non-compliance: 65% of cosmetics, 63% of food supplements, and 60% of personal protection equipment failed to meet standards. Officials emphasized that the fine was not for discovering illegal products but for AliExpress’s failure to implement barriers to protect consumers from “illegal, non-compliant and counterfeit goods,” which violates EU law. The investigation lasted over two years, and AliExpress was given opportunities to rectify its compliance procedures but failed to do so.
Systemic Failures in Enforcement
The commission found that AliExpress’s terms and conditions appeared compliant, but sellers could easily list non-compliant goods. Internal testing revealed large-scale breaches despite the company’s claims of operating within the EU’s “safety gate” rapid alert system. The commission “found millions of products that reappeared online which sometimes stayed for longer than a month” after being flagged as illegal. Particular concern was raised about counterfeit goods, with sellers easily bypassing barriers, sometimes “miscategorising” counterfeit fashion labels as non-branded.
Market Dominance
AliExpress is the largest Chinese online retail operator in the EU, with 193 million users, significantly more than Shein (156 million) and Temu (130 million).
