Alibaba’s online marketplace AliExpress has been fined €550 million ($629 million) by the European Union for failing to adequately prevent the sale of illegal, unsafe and counterfeit products on its platform.
The penalty, announced by the European Commission on Monday, is the largest fine issued under the EU’s Digital Services Act (DSA), which requires major online platforms to take stronger measures against illegal and harmful content.
The Commission said AliExpress failed to properly assess and reduce the risks linked to illegal products being sold through its marketplace. It had opened proceedings against the company in June last year over alleged breaches of key DSA obligations.
EU tech chief Henna Virkkunen said the platform’s shortcomings posed risks to consumers and created unfair competition for companies that comply with European rules.
“This is very dangerous for consumers, unfair for companies which are complying with all our rules,” Virkkunen told reporters.
AliExpress had 193 million European users last year, according to the Commission, making it one of the region’s most widely used online shopping platforms. Virkkunen noted that one in five Europeans said they shop monthly on AliExpress, Shein or Temu.
The Commission said AliExpress allowed products including counterfeit goods, unsafe toys and dangerous cosmetics to remain online for extended periods. Regulators also criticised the company’s systems for recommending and advertising products, saying they contributed to the spread of illegal items.
The EU said AliExpress had overestimated the effectiveness of its systems for detecting and removing illegal products and had not properly assessed whether it had enough staff to manage risks.
The regulator also found problems with the platform’s penalties for sellers and its “brand authorisation” system, which was designed to prevent counterfeit sales but was described as ineffective, understaffed and vulnerable to being bypassed by traders.
As part of the ruling, AliExpress must propose remedial measures by October 20. The company could face additional penalties if the Commission determines in December that it has not complied with the DSA requirements.
The fine is significantly higher than previous penalties issued under the Digital Services Act, including a €120 million fine against Elon Musk’s social media platform X and a €200 million penalty against online marketplace Temu.
The Commission said the relatively new nature of the Digital Services Act was considered a mitigating factor when calculating AliExpress’ penalty, which could otherwise have been higher.
Alibaba did not immediately respond to requests for comment to Reuters.
