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Tuesday, Jul 21, 2026
Outside the box.
EU Imposes Record €550 Million Digital Services Fine on AliExpress
Regulators found that the Alibaba-owned marketplace failed to control systemic risks from illegal, counterfeit and unsafe goods, while AliExpress called the penalty disproportionate and prepared an appeal.
The European Commission has fined AliExpress €550 million for failing to assess and curb systemic risks arising from illegal, counterfeit and unsafe products sold through its marketplace.
The penalty is the largest imposed under the European Union’s Digital Services Act and places the Alibaba-owned platform at the centre of an intensifying campaign to make major online retailers accountable for what reaches European consumers.
The decision concerns shortcomings that continued until at least June 2025. Regulators found that counterfeit clothing, unsafe toys, dangerous cosmetics and other non-compliant goods circulated on AliExpress, sometimes remaining available for weeks after detection.
Products previously identified as illegal also reappeared, while sellers could circumvent safeguards by placing items in misleading categories.
The case is not based simply on the presence of individual prohibited listings.
The key issue is whether AliExpress established systems proportionate to the scale and foreseeable risks of its business.
Under the Digital Services Act, the largest platforms must identify dangers created by their services, introduce effective safeguards, test whether those measures work and correct persistent failures.
The Commission concluded that AliExpress had not met that standard.
Its investigation identified inadequate internal risk assessments, insufficient staffing for product checks and recommendation systems that continued promoting problematic listings.
Some reviewers were given only tens of seconds to determine whether an item complied with European rules, limiting the depth of scrutiny applied to a marketplace containing vast numbers of products.
AliExpress has about 193 million users in the European Union, making it one of the bloc’s largest online retail platforms.
That reach is central to the enforcement decision: a weakness in screening or seller oversight can expose consumers across 27 countries to unsafe merchandise at enormous scale.
Formal proceedings began in March 2024 and examined risk management, content moderation, trader traceability, advertising transparency, recommendation systems, complaint handling and access to data for researchers.
In June 2025, regulators issued preliminary findings that AliExpress had failed to assess and mitigate risks linked to illegal goods.
At the same time, the Commission accepted commitments from the company covering several other parts of the investigation.
Those undertakings, which became legally binding, addressed mechanisms for reporting unlawful listings, internal complaints, advertising and recommendation transparency, trader identification, researcher access and controls targeting hidden links, affiliate marketing and products that could endanger health or minors.
Breaching those commitments can itself trigger further enforcement.
The €550 million sanction reflects the Commission’s conclusion that the remaining failures were serious and systemic.
Digital Services Act penalties can reach 6% of a company’s worldwide annual turnover.
The fine is nevertheless less than 1% of the roughly €122 billion in revenue generated by Alibaba in its previous financial year.
Henna Virkkunen, the Commission’s executive vice-president responsible for technology sovereignty, security and democracy, said the circulation of counterfeit clothing, unsafe toys and dangerous cosmetics was not an unavoidable consequence of internet shopping.
She said scale did not excuse inadequate safeguards and that risks had to be identified and addressed systematically.
AliExpress rejected the scale of the penalty.
The company said it had invested substantial resources in risk assessment, product safety and consumer protection since the European rules took effect.
It described the fine as disproportionate, argued that the decision failed to recognise improvements already made and said it would appeal.
The ruling extends scrutiny across the fast-growing market for inexpensive goods shipped directly to European customers.
Temu previously received a €200 million Digital Services Act fine over similar product-safety failures, while other large marketplaces remain subject to investigations and tighter import controls.
The enforcement drive seeks to close the practical gap between laws governing goods sold in physical shops and the immense, rapidly changing inventories offered online.
AliExpress must now submit a corrective action plan by 20 October explaining how it will remedy its failures to assess and mitigate systemic risk.
Rejection of that plan or continued non-compliance could expose the company to additional sanctions, making implementation of stronger product controls the next binding stage of the case.
The penalty is the largest imposed under the European Union’s Digital Services Act and places the Alibaba-owned platform at the centre of an intensifying campaign to make major online retailers accountable for what reaches European consumers.
The decision concerns shortcomings that continued until at least June 2025. Regulators found that counterfeit clothing, unsafe toys, dangerous cosmetics and other non-compliant goods circulated on AliExpress, sometimes remaining available for weeks after detection.
Products previously identified as illegal also reappeared, while sellers could circumvent safeguards by placing items in misleading categories.
The case is not based simply on the presence of individual prohibited listings.
The key issue is whether AliExpress established systems proportionate to the scale and foreseeable risks of its business.
Under the Digital Services Act, the largest platforms must identify dangers created by their services, introduce effective safeguards, test whether those measures work and correct persistent failures.
The Commission concluded that AliExpress had not met that standard.
Its investigation identified inadequate internal risk assessments, insufficient staffing for product checks and recommendation systems that continued promoting problematic listings.
Some reviewers were given only tens of seconds to determine whether an item complied with European rules, limiting the depth of scrutiny applied to a marketplace containing vast numbers of products.
AliExpress has about 193 million users in the European Union, making it one of the bloc’s largest online retail platforms.
That reach is central to the enforcement decision: a weakness in screening or seller oversight can expose consumers across 27 countries to unsafe merchandise at enormous scale.
Formal proceedings began in March 2024 and examined risk management, content moderation, trader traceability, advertising transparency, recommendation systems, complaint handling and access to data for researchers.
In June 2025, regulators issued preliminary findings that AliExpress had failed to assess and mitigate risks linked to illegal goods.
At the same time, the Commission accepted commitments from the company covering several other parts of the investigation.
Those undertakings, which became legally binding, addressed mechanisms for reporting unlawful listings, internal complaints, advertising and recommendation transparency, trader identification, researcher access and controls targeting hidden links, affiliate marketing and products that could endanger health or minors.
Breaching those commitments can itself trigger further enforcement.
The €550 million sanction reflects the Commission’s conclusion that the remaining failures were serious and systemic.
Digital Services Act penalties can reach 6% of a company’s worldwide annual turnover.
The fine is nevertheless less than 1% of the roughly €122 billion in revenue generated by Alibaba in its previous financial year.
Henna Virkkunen, the Commission’s executive vice-president responsible for technology sovereignty, security and democracy, said the circulation of counterfeit clothing, unsafe toys and dangerous cosmetics was not an unavoidable consequence of internet shopping.
She said scale did not excuse inadequate safeguards and that risks had to be identified and addressed systematically.
AliExpress rejected the scale of the penalty.
The company said it had invested substantial resources in risk assessment, product safety and consumer protection since the European rules took effect.
It described the fine as disproportionate, argued that the decision failed to recognise improvements already made and said it would appeal.
The ruling extends scrutiny across the fast-growing market for inexpensive goods shipped directly to European customers.
Temu previously received a €200 million Digital Services Act fine over similar product-safety failures, while other large marketplaces remain subject to investigations and tighter import controls.
The enforcement drive seeks to close the practical gap between laws governing goods sold in physical shops and the immense, rapidly changing inventories offered online.
AliExpress must now submit a corrective action plan by 20 October explaining how it will remedy its failures to assess and mitigate systemic risk.
Rejection of that plan or continued non-compliance could expose the company to additional sanctions, making implementation of stronger product controls the next binding stage of the case.
