Chinese online marketplace EU fined Aliexpress €550m

The European Commission has imposed a fine of 550 million euros against the Chinese online marketplace AliExpress for failing to remove illegal products from its platform. The penalty was announced following allegations that counterfeit clothing, unsafe toys, and hazardous cosmetics remained on the site for weeks despite repeated warnings. According to the commission, these items continued to circulate even after being flagged as non-compliant with EU regulations. AliExpress, which operates under the Alibaba Group, responded to the fine by stating it did not agree with the decision or the “unproportional” financial penalty. The company claimed the fine does not reflect the substantial improvements it had already made to comply with regulations. It added that it is carefully reviewing the decision and considering all available options. The company emphasized that it continues to work toward ensuring compliance with EU standards. The European Commission argued that AliExpress did not take sufficient measures to protect consumers within the EU from illegal goods. The commission noted that some sellers who should have been penalized for selling prohibited items were still able to continue their operations. This suggests that the platform failed to effectively enforce its rules against such activities. While the fine represents the highest yet under the Digital Services Act (DSA), it falls significantly below the potential maximum penalty of over seven billion euros. A European official explained that the fine could have reached up to six percent of the global annual turnover of the entire Alibaba group. Based on figures provided by the European Commission, the group’s total revenue was estimated at approximately 120 billion euros last year. Similar legal actions have targeted other Chinese e-commerce platforms operating in Europe. Recently, the EU Commission also levied a 200 million euro fine against another platform, Temu, for similar violations. The commission warned that EU consumers frequently encountered illegal products on Temu's platform. These cases highlight a broader concern regarding the enforcement of consumer protection laws against large international marketplaces. The commission criticized AliExpress for insufficient staffing in its quality control processes. According to reports, the number of products requiring review exceeds the capacity of the team responsible for monitoring them. Additionally, the commission found that some illegal products were recommended or advertised before they were removed from the platform. Testing conducted by Brussels-based regulators revealed that numerous counterfeit t-shirts, shoes, and children’s toys continued to circulate despite these efforts. Counterfeit goods remain a particular focus of the commission’s investigations. It highlighted that fake products sold on AliExpress often undercut legitimate businesses that invest in design, safety testing, and innovation. These counterfeit products force compliant companies into unfair competition by bypassing necessary investments. EU Digital Commissioner Henna Virkkunen stated that AliExpress' practices endanger consumers in Europe and are also unfair to businesses that adhere to all applicable laws. Online retailers such as AliExpress, Temu, and Shein are increasingly influential in Europe, leading to a surge in package deliveries through customs. To counter this trend, the EU introduced a new tax effective this month, charging three euros per package valued at less than 150 euros. This measure aims to increase transparency and reduce the influx of potentially illicit goods into the region. AliExpress has until October 20th to submit a corrective action plan to the European Commission. If the commission finds the proposed measures inadequate, further penalties or legal actions could follow. The outcome of this case will likely influence future regulatory approaches towards major international e-commerce platforms operating within the EU.