EU fines AliExpress record €550M for illegal product sales

The European Commission on Monday fined Alibaba's ↗ 2.55% AliExpress a record €550 million ($629 million) for failing to tackle the sale of illegal, unsafe, and counterfeit products on its platform, marking the largest penalty ever issued under the EU's Digital Services Act.investing+2

Systemic Failures in Moderation

The Commission found that AliExpress breached its obligations to assess and mitigate the risks of illegal product dissemination across multiple dimensions. The platform did not properly evaluate whether it had sufficient staff to review potentially illegal products, overestimated the effectiveness of its detection systems, and relied on a single quantitative indicator that failed to measure how well its moderation prevented prohibited goods from appearing or reappearing.miragenews

On the mitigation side, the regulator found that counterfeit goods, unsafe toys, and dangerous cosmetics remained online for weeks even after detection. AliExpress's product compliance checks could be "easily circumvented through mis-categorisation," with the platform allocating insufficient staff to verify whether products were correctly categorized. Traders intentionally placed products in the wrong category to benefit from more flexible requirements, the Commission said.miragenews

The platform's "brand authorisation" system, intended to prevent counterfeit sales, was found to be ineffective and understaffed, allowing traders to easily bypass it.miragenews

"This is very dangerous for consumers, unfair for companies which are complying with all our rules," EU tech chief Henna Virkkunen told reporters.investing

Escalating EU Enforcement

The fine is the third issued under the DSA, following a €120 million penalty against X in December 2025 for transparency violations and a €200 million fine against Temu in May 2026 for similar risk-assessment failures. The AliExpress penalty more than doubles the previous record.digital-strategy.europa+1

The Commission's investigation into AliExpress began in March 2024. In June 2025, preliminary findings were issued alongside binding commitments the platform agreed to on advertising transparency, researcher data access, and trader traceability. However, the risk-assessment and mitigation failures remained unresolved, leading to Monday's non-compliance decision.digital-strategy.europa+1

What Comes Next

AliExpress has until October 20, 2026, to submit an action plan setting out measures to remedy its breaches. The European Board for Digital Services will then have one month to issue its opinion, after which the Commission will adopt a final decision with an implementation deadline. Failure to comply could trigger periodic penalty payments.ilsole24ore+1

AliExpress, which had 193 million European users last year, is expected to challenge the decision. Reuters reported the company called the fine "disproportionate" and said it is reviewing all available options.srnnews+1