AliExpress faces a significant fine: the EU has imposed a record €550 million penalty under the DSA.

      Alibaba’s AliExpress has received a €550 million ($629 million) fine from the European Union. According to Brussels, the Chinese shopping platform failed to prevent illegal, unsafe, and counterfeit products from being listed on its site.

      This penalty, announced on Monday, is the largest to date under the EU’s Digital Services Act (DSA), which mandates that very large platforms identify and mitigate risks associated with their services.

      Key issues with AliExpress

      The European Commission detailed numerous shortcomings in its announcement. Central to the issues was AliExpress's inadequate assessment of the risks posed by illegal goods and its insufficient efforts to address them.

      The Commission noted that the platform did not verify whether there were sufficient staff to review questionable listings. It relied on a single performance metric that presented a biased view of its moderation efforts, while internal tests revealed a different reality. Counterfeit apparel, unsafe toys, and hazardous cosmetics remained available for weeks even after being reported.

      The platform's recommendation and advertising systems exacerbated the situation. Tests conducted by the Commission indicated that illegal items were being promoted to consumers before being removed. Moreover, a penalty policy aimed at bad sellers was not enforced, allowing flagged stores to continue operating.

      Some sellers exploited the system by misclassifying products to avoid stricter scrutiny. Additionally, AliExpress’s “brand authorization” system, designed to prevent counterfeit items, was understaffed and easily circumvented.

      The third significant DSA fine

      AliExpress is now the third platform to be penalized under the DSA and has received the largest fine thus far. Previously, Brussels fined Elon Musk’s X €120 million in December and Chinese competitor Temu €200 million in May, both for similar violations.

      The considerable scale of the fine is attributable to AliExpress's user base, which counted 193 million users in Europe last year, according to EU tech chief Henna Virkkunen. She noted that Shein had 156 million users and Temu 130 million, stating that “one in five Europeans shop once a month from Shein, Temu, and AliExpress.” Shein is currently under its own investigation by the EU.

      Since the DSA was fully implemented in 2024, Brussels has become increasingly willing to enforce it against the largest platforms. The fine could have been even higher, as the Commission acknowledged the novelty of the law as a factor in its decision to impose a lesser penalty this time.

      ‘Scale is not an excuse’

      Virkkunen emphasized that the case is centered on consumer protection rather than regulatory burden. She highlighted that “the proliferation of counterfeit clothing, unsafe toys, dangerous cosmetics, and other illegal and harmful products is not an inevitable consequence of online shopping.” She stated, “Scale is not an excuse.”

      Furthermore, she remarked that lax enforcement by some platforms disadvantages those that comply with all regulations. Fakes, she noted, are “unfair for companies which are complying with all our rules.” Alibaba did not immediately provide a response to a request for comment, according to Reuters.

      Next steps

      The fine is not the conclusion of the matter. AliExpress has until October 20 to present Brussels with a plan to address the identified issues. A panel of national regulators will then have a month to review it, followed by an additional month for the Commission to issue its decision.

      If the response is deemed insufficient, the company could face further repercussions, including potential additional fines on top of Monday’s penalty. Significant violations of the DSA could cost a platform up to 6% of its global annual revenue, which for a company the size of Alibaba, is substantially more than €550 million.