AliExpress said it will appeal the "disproportionate" penalty.
The European Commission has fined Alibaba-owned marketplace AliExpress €550 million ($629 million) for failing to do enough to tackle the sale of illegal, unsafe and counterfeit products on its platform. The penalty is the largest ever imposed under the EU's Digital Services Act (DSA).
The Commission first charged AliExpress in June last year with failing to comply with DSA requirements that oblige very large online platforms to assess and mitigate the risks linked to the spread of illegal products. Although the company was given time to address the shortcomings, the regulator concluded that its measures were insufficient.
EU tech chief Henna Virkkunen said counterfeit goods, unsafe toys, dangerous cosmetics and other illegal products continued to be sold on the platform, posing risks to consumers and creating unfair competition for businesses that comply with EU rules.
Virkkunen said AliExpress had 193 million users in Europe last year, compared with 156 million for Shein and 130 million for Temu. Temu has already been fined under the DSA, while Shein remains under investigation.
Regulator cites systemic failures
According to the European Commission, AliExpress failed to properly assess risks, overestimated the effectiveness of its moderation systems and did not exercise sufficient oversight of sellers. The regulator said the platform's recommender and advertising systems contributed to the spread of illegal products, while some sellers continued offering prohibited goods even after being penalised.
The Commission also criticised AliExpress's mandatory brand authorisation system, saying it was ineffective, understaffed and could be easily circumvented by sellers of counterfeit products.
The regulator added that the novelty of the DSA was treated as a mitigating factor when calculating the penalty, meaning the fine could have been even higher.
AliExpress to appeal
AliExpress said it disagreed with the Commission's findings and considers the fine disproportionate.
"Today's decision and disproportionate fine ignore our sound risk management framework and the significant, proactive enhancements we have made,"
the company said in a statement.
AliExpress also said it had cooperated with the European Commission throughout the investigation and adapted its compliance measures to meet the regulator's evolving requirements.
The €550 million penalty is the largest imposed under the DSA to date. By comparison, social media platform X was fined €120 million in December last year, while Temu received a €200 million penalty in May for DSA violations.
