AliExpress Hit with $629 Million EU Fine Over Sales of Illegal, Counterfeit Products

The European Union has imposed a record €550 million ($629 million) fine on Alibaba's e-commerce platform AliExpress. The penalty stems from the platform's failure to adequately combat the sale of illegal, unsafe, and counterfeit goods, a violation of the EU's Digital Services Act (DSA).

This marks the third major fine issued by the European Commission under the DSA, a landmark law designed to hold very large online platforms accountable for moderating illegal and harmful content. The Commission had previously charged AliExpress in June of the previous year with not properly assessing and mitigating the risks associated with illegal product sales.

EU tech chief Henna Virkkunen emphasized the danger to consumers and the unfairness to compliant businesses, noting AliExpress's significant user base in Europe. The Commission criticized AliExpress for underestimating its staffing needs for risk review and overestimating its systems' effectiveness in detecting and removing illicit items. The platform's recommender and advertising systems were also flagged for potentially amplifying the spread of illegal products.

Further issues included an ineffective penalty policy that allowed penalized sellers to continue operating and a mandatory "brand authorization" system that was easily bypassed by counterfeit traders. While the novelty of the DSA was considered a mitigating factor, the fine still significantly surpasses penalties levied against platforms like X and Temu for similar violations.

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This is very dangerous for consumers, unfair for companies which are complying with all our rules.