EU fines AliExpress a record €550 million for selling counterfeit and dangerous goods

The European Commission has slapped online marketplace AliExpress with a record fine of €550 million — the largest penalty ever issued under the Digital Services Act (DSA), the EU regulation governing large online platforms.

According to Brussels, the company had long underestimated the risks tied to selling illegal goods. The investigation found that AliExpress freely allowed the sale of counterfeit products, hazardous toys, risky cosmetics and other items that failed to meet European safety and consumer-protection standards.

The European Commission noted that AliExpress had overestimated the effectiveness of its own automated systems for detecting banned products, while the team responsible for reviewing suspicious listings was understaffed. According to a Commission spokesperson, employees often had just 10 to 20 seconds to assess each complaint.

Separate complaints target the platform's recommendation algorithms and advertising system: tests showed that illegal goods were being pushed into recommendations and ads before they could be taken down.

Another weak spot identified was seller vetting — sanctions against merchants who repeatedly offered banned goods were applied inconsistently, allowing some shops to keep operating on the platform even after previous penalties. In addition, some sellers deliberately listed products under the wrong categories to dodge stricter checks.

The Commission paid particular attention to counterfeits: despite an explicit ban in the platform's terms of use, fakes were spreading widely on AliExpress, while the trademark-verification system was ineffective due to a lack of staff.

Henna Virkkunen, the European Commission's Executive Vice-President for Tech Sovereignty, Security and Democracy, said e-commerce remains one of the top priorities in enforcing the DSA. She noted that today one in five EU residents regularly shops on Chinese marketplaces.

"If such companies sell illegal goods online, it means millions of our citizens across the EU end up buying them," Virkkunen said. She added that the platform's size is no excuse: "The spread of counterfeit clothing, dangerous toys, risky cosmetics and other illegal or harmful products is not an inevitable price of shopping online. Risks must be systematically identified and eliminated so that consumers can shop safely on the internet."

AliExpress must submit an action plan to the European Commission by October 20 at the latest, outlining how it will fix the violations identified. If the requirements aren't met, the company faces additional fines.

Despite its record size, the €550 million fine remains well below the maximum allowed under EU law. According to the Commission's estimate, the sum amounts to less than one percent of last year's revenue for Alibaba Group, AliExpress's parent company, even though DSA rules allow fines of up to six percent of a company's annual global turnover.

As a reminder, the Digital Services Act (DSA) and Digital Markets Act (DMA) came into force in 2023, aiming to ensure transparency, user safety and fair competition among the world's largest online platforms.

Source: novinky.cz