EU hits AliExpress with €550m DSA fine for failing to stop illegal goods
The European Commission has fined AliExpress €550 million ($630m) for failing to prevent illegal products from circulating on its platform. It's the largest penalty ever handed down under the Digital Services Act, and a clear signal that Brussels is done being patient with Chinese e-commerce giants.
AliExpress, the consumer arm of Alibaba, had already been warned. Last year the Commission told it to get its house in order, specifically around illegal product listings and recommendation systems that were actively surfacing dodgy goods to shoppers. A year on, the EC concluded that not enough had changed.
The Commission's findings make for grim reading for Alibaba's legal team. AliExpress apparently failed to check whether it had enough staff to review potentially illegal listings. It didn't properly assess how its recommendation and advertising algorithms were amplifying the spread of illegal products. Its detection systems didn't work. Its penalty enforcement for rogue traders was inadequate. Sellers were sidestepping compliance checks through basic mis-categorisation tricks. And counterfeit goods continued to spread largely unchecked.
That's a fairly comprehensive failure across the board.
The €550 million figure sounds enormous, and it is. But it's worth noting the Commission explicitly acknowledged mitigating factors, including the relative newness of the DSA framework, when setting the number. Under the Act, fines can reach six percent of global annual turnover. Alibaba Group posted revenues of $148 billion for the year ending March 2024, which means Brussels could theoretically have demanded close to $9 billion. By that measure, €550 million is almost a discount.
This fine doesn't exist in isolation. Just weeks ago, the EU introduced new customs charges that look very much designed to make life harder for AliExpress, Temu, and Shein, whose business models depend heavily on cheap single-item shipments direct from China. European policymakers have long been uncomfortable with that model, worried it creates a regulatory blind spot for unsafe and counterfeit goods while undercutting local retailers on price.
The Commission has quietly indicated it would prefer these platforms to ship in bulk to EU-based warehouses, which would bring them within cleaner regulatory reach. Fining AliExpress half a billion euros is another push in that direction. Whether Alibaba takes the hint is another matter.