EU fines AliExpress €550 million over illegal, counterfeit products

The European Union has imposed a record €550 million ($629 million) fine on China’s AliExpress for failing to prevent the sale of illegal, unsafe and counterfeit products on its online marketplace.

The penalty, announced by the European Commission, is the third issued under the EU's Digital Services Act (DSA), which requires the largest online platforms to take stronger action against illegal and harmful content, Caliber.Az reports, citing Reuters.

The Commission first charged AliExpress in June last year, alleging that the company had failed to meet the DSA's requirements to assess and mitigate the risks associated with the spread of illegal products.

AliExpress has until October 20 to implement corrective measures. The Commission said it will assess those proposals in December, warning that the company could face additional penalties if they fail to comply with the legislation.

"This is very dangerous for consumers, unfair for companies which are complying with all our rules," EU tech chief Henna Virkkunen told reporters.

Virkkunen noted that AliExpress had 193 million users in Europe last year, compared with 156 million for Shein and 130 million for Temu.

"One in five Europeans say they shop once a month from Shein, Temu and AliExpress," she said.

AliExpress rejected the Commission's decision, arguing that the financial penalty was excessive.

"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 said in an emailed statement.

"We are carefully reviewing the decision and considering all available options."

According to the Commission, AliExpress failed to adequately assess whether it had sufficient staff to review platform risks and overstated the effectiveness of its systems for detecting and removing illegal products.

Regulators also criticised the company's recommendation and advertising algorithms, saying they contributed to the spread of illegal goods. In addition, the Commission said AliExpress relied too heavily on a single performance indicator to evaluate its moderation system.

As a result, illegal products—including counterfeit goods, unsafe toys and hazardous cosmetics—remained available on the platform for extended periods, the regulator said.

The Commission further argued that AliExpress's sanctions against offending sellers were ineffective, allowing businesses that had been penalised to continue offering illegal products.

It also found that the platform's mandatory "brand authorisation" system, designed to prevent the sale of counterfeit goods, was understaffed, ineffective and easily bypassed by traders.

The Commission said the relatively recent introduction of the Digital Services Act was considered a mitigating factor when determining the size of the fine, noting that the penalty could have been even higher.

The €550 million sanction is substantially larger than the €120 million fine imposed on Elon Musk's social media platform X in December last year and the €200 million penalty issued against Temu in May, both for violations of the DSA.

AliExpress avoided a separate fine in June last year after agreeing to adopt measures aimed at curbing the spread of potentially illegal and pornographic material on its platform.

By Bakhtiyar Abbasov