Why AliExpress has been fined record €550m by EU
What's the story
The European Commission has slapped a record fine of €550 million on Chinese e-commerce giant AliExpress. The penalty is the largest ever imposed under the Digital Services Act (DSA), which came into effect in 2024. The DSA was introduced to protect consumers from illegal goods and misleading marketing practices. The fine comes as a result of AliExpress's failure to prevent the sale of illegal items like harmful clothing, cosmetics, and kitchen gadgets on its platform.
Official statement
Risks should be systematically identified and addressed: Commission
Henna Virkkunen, the European Commission's executive vice-president for tech sovereignty, security and democracy, criticized AliExpress for not meeting its obligations under the DSA.
She said that the presence of counterfeit clothing, unsafe toys, and dangerous cosmetics on the platform isn't an inevitable part of online shopping but rather a failure on AliExpress's part.
Virkkunen stressed that risks should be systematically identified and addressed to ensure safe online shopping for consumers.
Financial impact
Fine accounts for less than 1% of AliExpress's total revenue
While the fine is much higher than previous DSA penalties imposed on Temu (€200 million) and X (€120 million), it accounts for less than 1% of AliExpress's total revenue.
The maximum penalty under the DSA could have been 6% of AliExpress's global revenues, which are around €122 billion.
The commission found that AliExpress lacked sufficient staff to assess product legality and many illegal items were promoted through its recommendation systems.
Response
AliExpress calls fine 'disproportionate'
AliExpress has condemned the fine as "disproportionate," arguing that it doesn't accurately reflect its compliance framework and proactive measures taken. AliExpress is now reviewing the decision and considering all options available to them.
Compliance issues
EU's investigation into illegal products on online platforms
The EU's investigation into a sample of products sold on major retail platforms, including Shein, found high rates of non-compliance.
This included 65% of cosmetics, 63% food supplements, and 60% personal protective equipment such as hard hats and steel toe cap boots for construction sites.
The fine against AliExpress was not for the discovery of illegal products but for its failure to implement measures that would have protected consumers from "illegal, non-compliant and counterfeit goods."