AliExpress Fined €550 Million by EU Regulators for DSA Violations

AliExpress said it plans to appeal a penalty imposed by European Union (EU) regulators, who found shortcomings in the firm's efforts to curb illegal, unsafe and counterfeit goods.

The largest Chinese e-commerce platform in the EU, AliExpress, has been fined €550 million ($629 million) for failing to tackle sales of illegal, unsafe and counterfeit products.

"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 Vice President Henna Virkkunen said on Monday.

It is the largest fine ever imposed under the Digital Services Act (DSA), which sets out clear rules for online services in the EU, targeting especially very large online platforms.

AliExpress said it will appeal the "disproportionate" fine, saying it considers the penalty excessive.

AliExpress faces October 20 deadline

The online retail giant, which belongs to the Alibaba Group, must pay the fine and has until October 20, to submit a plan to address the breaches. EU regulators will then review the plan, after which the company could face further penalties.

A year ago, AliExpress agreed to tighten controls on illegal and potentially dangerous goods, such as medicines and supplements. But the European Commission said the measures did not fully resolve its broader concerns.

The commission said AliExpress:

Failed in some cases to penalize traders selling illegal products, allowing them to continue operating on the platform.

Lacked sufficient staff to effectively review potentially illegal listings.

Inspectors faced excessive workloads, hampering oversight efforts.

Some illegal products were recommended or promoted before being removed from the platform.

But AliExpress said the EU's decision "ignores our sound risk management framework and the significant, proactive enhancements we have made."

The company also said it has worked with the Commission to meet its "evolving expectations."

DSA used to rein in Big Tech

According to the EU, AliExpress has 193 million users in the bloc, ahead of online fashion giant Shein and retailer Temu, which have 156 million and 130 million users, respectively.

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

Temu was fined €200 million in May, while Elon Musk's social media platform X was fined in December last year, both for DSA violations.