Alibaba's AliExpress fined $629 million by EU over illegal products

The EU has fined Alibaba-owned AliExpress a record $629 million, citing failures in content moderation, seller enforcement, and efforts to stop the sale of illegal products

  Alibaba-owned AliExpress has been slapped with a record $629 million fine by the European Union after regulators found that the online marketplace failed to stop the sale of illegal, unsafe, and counterfeit products. The penalty is the largest ever imposed under the EU's Digital Services Act (DSA), signalling that European authorities are taking a tougher stance against major online platforms that fail to protect consumers.

 

The European Commission said AliExpress did not do enough to assess and reduce the risks associated with illegal goods sold through its platform. It also warned that the company could face additional penalties later this year if it fails to implement satisfactory corrective measures.

 

 

What are the charges against AliExpress?

 

The commission said its investigation uncovered several shortcomings in how AliExpress identified and tackled the risks associated with illegal products on its platform. They found that AliExpress failed to adequately:

 

• Assess and mitigate the risks of illegal products being sold
• Remove unsafe and counterfeit items quickly enough
• Prevent banned or penalised sellers from continuing to operate or returning to the platform
• Allocate sufficient staff and resources to enforce its own rules
• Ensure that its content moderation systems effectively detected and removed illegal products

 

Regulators also criticised the platform's recommender and advertising systems, saying they amplified the visibility of illegal products. In addition, the European Commission said AliExpress relied on a single quantitative indicator to measure its moderation system's effectiveness, which was not enough to prevent illegal products from appearing or reappearing in similar forms.

 

"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," European Commission Executive Vice-President for Tech Sovereignty, Security and Democracy Henna Virkkunen said in a statement, as reported by the Associated Press.

 

Record penalty under the Digital Services Act

 

The $629 million penalty is the largest ever issued under the Digital Services Act, which was introduced to make major online platforms more accountable for illegal content and products. It surpasses previous DSA fines imposed on other large platforms.

 

Earlier this year, Temu was fined nearly $232 million after the European Commission found that it failed to adequately assess and mitigate the risks associated with illegal products sold on its marketplace. In December last year, X was fined around $140 million for breaching the DSA's transparency rules, including misleading users through its paid blue checkmark system, shortcomings in its advertising repository, and failing to provide researchers with access to public data.

 

What did AliExpress say?

 

AliExpress said the fine was excessive and plans to appeal the decision.

 

The company argued that it has significantly strengthened its risk management systems and has continued to cooperate with the regulators throughout the investigation. It also said it remains committed to complying with the DSA as regulatory expectations continue to evolve.

 

What to watch next

 

The European Commission has given AliExpress until October 20 to submit a plan outlining how it will address the identified shortcomings. Regulators will then assess whether the proposed measures meet the DSA's requirements. If the Commission concludes in December that AliExpress has not fully complied, the company could face further financial penalties.

 

The action also reflects the EU's broader effort to tighten oversight of large digital platforms as online marketplaces continue to grow.