New Delhi: The European Union has imposed a record 550 million euro (about $630 million) fine on Chinese online retail platform AliExpress, accusing it of failing to prevent the sale of counterfeit and unsafe products across its marketplace.
The penalty, announced by the European Commission on July 20, is the largest ever imposed under the Digital Services Act (DSA), the EU’s landmark legislation designed to regulate online platforms, strengthen consumer protection and curb the spread of illegal content and products.
The action marks another major regulatory intervention against a Chinese e-commerce giant operating in Europe and underscores the EU’s determination to hold large digital platforms accountable for consumer safety. The DSA covers a wide range of digital services, including social media moderation, targeted advertising, platform transparency and the sale of illegal goods through online marketplaces.
The Commission’s investigation into AliExpress began in March 2024 and concluded that the company had failed to ensure that products sold on its platform complied with the European Union’s environmental and safety standards. According to regulators, numerous illegal products, including counterfeit goods, unsafe toys and dangerous cosmetics, continued to circulate on the platform for extended periods even after they had been identified.
Commission finds serious compliance failures
The European Commission said AliExpress lacked adequate systems and staffing to properly verify whether products met EU legal requirements. Investigators found that moderators responsible for reviewing listings were often given only tens of seconds to determine whether a product complied with European rules, making effective enforcement virtually impossible.
Regulators also concluded that illegal products were being actively promoted through AliExpress’s recommendation algorithms before they were eventually removed, increasing consumer exposure to unsafe and counterfeit merchandise.
Commenting on the decision, Henna Virkkunen, the Commission’s Executive Vice President for Tech Sovereignty, Security and Democracy, said the widespread availability of illegal products on the platform reflected a failure to comply with obligations under the Digital Services Act.
She stated that the circulation of counterfeit clothing, unsafe toys, dangerous cosmetics and other harmful products should not be accepted as an inevitable consequence of online shopping. According to Virkkunen, the responsibility lies with platforms to systematically identify and address such risks, regardless of their size. She added that the Commission was now requiring AliExpress to meet that standard and implement corrective measures.
AliExpress strongly rejected the Commission’s decision, describing the financial penalty as excessive. A company spokesperson said AliExpress disagreed with both the ruling and what it called the “disproportionate” fine, arguing that it failed to recognise the company’s existing compliance framework and the significant proactive improvements already introduced. The spokesperson added that the company was carefully reviewing the decision and considering all available legal options.
Compliance deadline and growing EU crackdown
The latest action follows commitments made by AliExpress to the European Commission in June 2025, when the company pledged to strengthen its monitoring systems for illegal products after regulators expressed concerns that it had underestimated the risks associated with goods sold on its platform.
Following the latest ruling, AliExpress has been given until October 20 to submit a detailed action plan explaining how it will address the Commission’s concerns and bring its operations into compliance with EU regulations.
The €550 million penalty significantly exceeds previous fines imposed under the Digital Services Act. In December 2025, Elon Musk’s social media platform X was fined 120 million euros (about $140 million) over multiple violations. The Commission accused X of operating a “deceptive” verification system, alleging that blue checkmarks were issued without meaningful identity verification while the platform also failed to provide sufficient transparency regarding its advertising practices.
The fine against X drew criticism from senior US officials, including Secretary of State Marco Rubio, who described the EU’s action as an attack on American technology companies and the American people.
More recently, in May, the European Union imposed a 200 million euro (about $232 million) penalty on another Chinese e-commerce platform, Temu, owned by PDD Holdings, for failing to prevent the sale of illegal and dangerous products. Temu similarly rejected the decision, calling the fine disproportionate.
Despite setting a new record under the Digital Services Act, the penalty against AliExpress represents less than one per cent of the approximately $139 billion in annual revenue generated last year by its parent company, Alibaba Group. Under the DSA, companies found to have violated the legislation can face penalties of up to 6 per cent of their global annual revenue, highlighting the broad enforcement powers available to European regulators as they intensify scrutiny of major international digital platforms.
