In a landmark enforcement of the European Union’s landmark Digital Services Act (DSA), Chinese e-commerce giant AliExpress has been issued a record €550 million penalty for systemic failures to stop the sale of counterfeit and unsafe products across its platform to millions of European consumers. The penalty, the largest ever handed down under the DSA, follows a two-year investigation that uncovered widespread gaps in AliExpress’s risk assessment and product compliance systems, regulators announced Wednesday.
AliExpress, a subsidiary of Chinese tech conglomerate Alibaba, boasts 193 million monthly active users across the European Union — a larger user base than competing Chinese fast-fashion platforms Shein and Temu, according to EU data. The investigation concluded that the platform’s automated detection tools for illegal products failed to flag thousands of dangerous and counterfeit listings, while flagged items often remained active on the site for weeks before being removed. Regulators also found that AliExpress did not enforce meaningful penalties against third-party sellers offering illegal goods, and that basic compliance checks could be easily bypassed by bad actors.
EU Digital Commissioner Henna Virkkunen emphasized that the circulation of harmful counterfeit goods is not an inevitable downside of e-commerce, but a direct result of AliExpress’s failure to meet its legal obligations under EU law. “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,” Virkkunen said in a statement.
The DSA, which went into full effect for large online platforms last year, requires major tech providers to implement rigorous due diligence to remove illegal and harmful content from their services, with maximum fines reaching 6% of a company’s global annual turnover. Alibaba reported €122 billion in global turnover last year, meaning the maximum possible fine could have exceeded €7 billion, making the €550 million penalty far lower than the allowed cap.
AliExpress has pushed back against the ruling, calling the fine disproportionate and arguing that it does not reflect the proactive upgrades the company has already made to its compliance systems. “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,” a company spokesperson said. The platform added that it is currently reviewing the commission’s ruling and evaluating all legal options to challenge the penalty. AliExpress is required to pay the fine and submit a corrective action plan addressing the identified breaches to the European Commission by October 20.
This penalty marks the latest in a series of high-profile enforcement actions against large online platforms under the DSA. Earlier this year, competitor Temu was fined €200 million for failing to curb sales of unsafe children’s products, and last year Elon Musk’s social media platform X was hit with a €120 million fine over deceptive verification practices that exposed users to widespread scams.