EU fines AliExpress record €550m over illegal products

The European Union has fined AliExpress €550 million for failing to prevent the sale of illegal and counterfeit goods on its platform. The penalty, announced by the European Commission, is the largest imposed since the bloc’s Digital Services Act entered into force in 2022.

Regulators found that the e-commerce giant systematically overestimated its ability to detect and remove unsafe products that violated the bloc's strict environmental and safety standards. "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," EU tech chief Henna Virkkunen said.

When illegal items were flagged, they often remained online for weeks, with millions of banned products reappearing and being recommended to users before removal. Investigators also determined that AliExpress' mandatory "brand authorisation" system was understaffed and easily bypassed by traders. The platform further failed to suspend the accounts of sellers who repeatedly offered counterfeit goods.

The record fine dwarfs previous penalties under the Digital Services Act, including a €120 million fine against Elon Musk's X and a €200 million fine against Temu. While the maximum DSA penalty is six percent of global annual turnover, the €550 million sum is well below that threshold for Alibaba, AliExpress' parent company, which recorded €122 billion in turnover last year.

The enforcement carries heavy weight for the European e-commerce market, where AliExpress is the largest Chinese platform with 193 million users. A senior European official confirmed the EU is the company's biggest market, putting immediate pressure on its operations alongside rivals Shein and Temu, which count 156 million and 130 million EU users respectively.

AliExpress criticised the penalty as "disproportionate", arguing it did not adequately reflect the proactive enhancements it has made to its compliance framework. The company stated it was "considering all available options" as it faces an October 20 deadline to submit a remediation plan to the Commission. If it fails to comply, the platform risks periodic penalty payments.

The penalty arrives as the EU increases its scrutiny of Chinese retailers, including a new €3 levy on cheap parcels entering the bloc imposed this month. However, Virkkunen pushed back against the notion of targeted enforcement based on a platform's origin. "We are investigating several online platforms. So a big part of them are from the USA, many of them are from China and also from Europe," she said.