Alibaba’s AliExpress was fined 550 million euros (US$629 million) by the European Commission after regulators said it failed to assess and reduce risks linked to illegal, unsafe, and counterfeit goods sold in the EU under the Digital Services Act.

The EU opened the case in 2024 and said some products on AliExpress did not meet its environmental and safety standards, while repeat rule-breaking sellers were not effectively penalized.

AliExpress is subject to the bloc’s strictest Digital Services Act rules because it has 104.3 million average monthly users in the EU, above the 45 million threshold for very large online platforms.

Under the law, online marketplaces must verify sellers’ identities, make them identifiable to users, and provide tools to flag illegal goods. The biggest platforms must also assess and mitigate systemic risks.

The Commission also made binding AliExpress commitments for five years on trader traceability, notice-and-action systems, advertising and recommender transparency, and researcher data access, monitored by an independent trustee.

AliExpress said it disagreed with the decision and said the fine was disproportionate. It has until Oct. 20 to present a plan to address the failures. Penalties can reach 6% of a company’s global annual sales.

The action comes as EU regulators increase scrutiny of online marketplaces. Regulators have also preliminarily found Temu in breach of Digital Services Act obligations linked to illegal products.

🔗 Source: Bloomberg