AliExpress fined record €550m by EU for failing to stop sale of illegal and fake goods

The Chinese online retail platform AliExpress has been fined a record €550m (£470m) by the EU over its failure to stop illegal goods including harmful clothing, cosmetics and kitchen gadgets being sold through its site.The European Commission fine is the biggest imposed by the bloc under the Digital Services Act (DSA), legislation that came into force in 2024 to protect consumers from illegal goods, deceptive or addictive marketing techniques.Henna Virkkunen, the commission’s executive vice-president for tech sovereignty, security and democracy, said: “The spread of counterfeit clothing, unsafe toys, dangerous cosmetics and other illegal and harmful products is not an unavoidable cost of shopping online – it is a failure by AliExpress to comply with its obligations under the Digital Services Act.“Scale is not an excuse; risks must be identified and addressed systematically to ensure consumers can safely shop online. Today, we are holding AliExpress to this standard and request it to take action.”While the fine was much larger than those previously issued under the DSA to Temu (€200m) and X (€120m), it represented less than 1% of the €122bn that AliExpress’s parent company, Alibaba, generated in revenue last year. It could have been fined a maximum of 6% of global annual revenue.Temu was fined in May for failing to stop the sale of illegal and dangerous products, while X was fined for breaches including what the EU said was a “deceptive” blue tick verification badge given to users and the lack of transparency of the platform’s advertising. Temu is still under EU investigation on other issues and may yet face another fine.The European Commission found AliExpress did not have enough staff to assess the legality of products, sometimes giving them just “tens of seconds” to judge whether a product met EU standards.It also found many illegal products were being promoted under AliExpress’s recommendation systems and that the company’s internal risk assessments failed.“Many illegal products, from counterfeit products to unsafe toys and dangerous cosmetics, circulated on the platform and, even if detected, remained online for multiple weeks,” the commission said.The size of the fine reflected “the nature and gravity” of the platform’s failure to implement mitigating measures to stop consumers being offered harmful or dangerous goods, a senior commission official added.AliExpress immediately condemned the fine as “disproportionate”. It said: “We disagree with today’s decision and the disproportionate fine, which ‌does not adequately reflect our established framework and the significant, proactive enhancements we ⁠have made.“We are carefully reviewing the ‌decision and considering all available options.”Previous investigations by the EU of a sample of products sold on large retail platforms including Shein found 65% of cosmetics, 63% of food supplements and 60% of personal protection equipment, such as hard hats and steel toe cap boots for building sites, were non-compliant.skip past newsletter promotionafter newsletter promotionOfficials said the fine was not a result of the discovery of illegal products on AliExpress but its failure to put in place barriers or mitigations that would have protected consumers from “illegal, non-compliant and counterfeit goods”, which is illegal under EU law.After an investigation process lasting more than two years, the company was given the opportunity to rectify its compliance and risk procedures but failed to do so, the European Commission said.AliExpress operated terms and conditions that had the appearance of being compliant with EU law – that retailers should not place any illegal products on its platform – but the reality was that sellers could easily place non-compliant goods on the platform, the commission found.Through its internal testing, the commission found large-scale breaches despite the company’s claims to be operating within the scope of the EU’s “safety gate”, a rapid alert system for non-food products that allows unsafe products to be quickly identified, recalled or banned.The commission said it “found millions of products that reappeared online which sometimes stayed for longer than a month” after they had been flagged as being illegal under EU law.The commission was particularly concerned about the high number of counterfeit goods on the site and the ease with which a seller could get around barriers, sometimes “miscategorising” a counterfeit fashion label as non-branded.AliExpress is the largest online retail operator in the EU with 193 million users, making it significantly bigger than Shein with 156 million and Temu with 130 million.