The European Union fined Alibaba's AliExpress €550 million, or about $629 million, on Monday for failing to stop the sale of illegal, unsafe and counterfeit products on its platform, the largest penalty yet issued under the bloc's Digital Services Act.
The fine is the third the European Commission has handed down under the DSA, following a €120 million penalty against Elon Musk's X in December and a €200 million fine against rival Chinese retailer Temu in May. It lands days after Brussels ended the duty-free treatment of parcels worth less than €150, imposing a €3 flat duty aimed squarely at the low-price Chinese shopping platforms that have driven European e-commerce growth.
The regulator's case
The Commission said AliExpress "allocated insufficient staff" to product review, overestimated the effectiveness of its detection systems, and let unsafe toys and dangerous cosmetics remain listed "for multiple weeks" after they were flagged. Its mandatory "brand authorisation" system, meant to block counterfeit sellers, was "easily circumvented by traders selling fake products," the Commission said. The regulator also faulted the company's recommender and advertising systems for accelerating the spread of illegal listings, and its penalty policy for letting sanctioned sellers keep trading.
"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," EU tech chief Henna Virkkunen said. "Scale is not an excuse; risks must be identified and addressed systematically to ensure consumers can safely shop online."
The market at stake
Virkkunen told reporters AliExpress reached 193 million European users last year, ahead of Shein's 156 million and Temu's 130 million. Temu has already been fined; Shein is under a separate DSA investigation. "One in five Europeans say they shop once a month from Shein, Temu and AliExpress," Virkkunen said.
The Commission said the novelty of the Digital Services Act was a mitigating factor and that the fine could have been higher. Under the DSA, penalties can reach 6 percent of a company's global annual turnover.
The counterparty
AliExpress rejected the ruling. "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," the company said, adding it was "carefully reviewing the decision and considering all available options." That objection is the only industry perspective on the record; Monday's reporting drew exclusively from EU regulators and the company statement, with no independent trade-body or U.S. competition-authority response yet published.
AliExpress has until Oct. 20 to submit a remedial plan. The Commission will decide within two months whether the measures satisfy the DSA, and can impose additional periodic fines if they do not.