BRUSSELS – The European Commission fined AliExpress €550 million ($628 million) on Monday for systematically failing to remove illegal, unsafe, and counterfeit merchandise from its marketplace, marking the largest single penalty issued under the European Union’s Digital Services Act since the regulation took effect in 2023.
The ruling closes a formal investigation opened in March 2024 and targets Alibaba Group’s European marketplace arm, which Commission investigators found had overstated the reach of its automated detection systems while keeping human review teams too thin to catch what algorithms missed. Testing commissioned by Brussels found prohibited goods continuing to circulate through platform recommendations and paid advertisements even after individual sellers had been flagged for removal.
What investigators described was not a technical failure but a structural one. AliExpress’s brand authorization system, designed to bar counterfeiters from listing under legitimate trademarks, was both understaffed and easily bypassed. Sellers who wanted to avoid detection could miscategorize products, and the platform had no adequate tools to measure whether its own enforcement was producing results.
“When calculating penalties, authorities weighed violation severity, duration, and the number of affected EU citizens,” the Commission stated Monday.
Identified failures spanned multiple categories: weak algorithmic detection, inadequate penalties for repeat sellers, insufficient safeguards against product miscategorization, understaffed human review teams, and deficient measurement tools for assessing moderation effectiveness. Significant quantities of banned merchandise remained accessible on the platform even after enforcement sweeps.
The Digital Services Act, which took full effect for very large online platforms in August 2023, requires any marketplace with more than 45 million monthly active EU users to audit and mitigate systemic risks tied to their services. Fines can reach six percent of a company’s global annual turnover. AliExpress, which operates across the EU in multiple languages serving Germany, France, Spain, Poland, Italy, and beyond, crosses that threshold by a considerable margin.
The €550 million penalty eclipses all prior DSA enforcement actions and establishes a new benchmark for what noncompliance costs in Europe’s digital single market. The Commission has ordered AliExpress to submit a comprehensive compliance plan by October 2026. No date has been announced for a follow-on review.
For Brussels, the ruling carries a signal to a broader competitive field. AliExpress is one of several Chinese-owned platforms, including Temu and Shein, that expanded rapidly across European markets over the past three years, drawing sustained complaints from domestic retailers who argue that foreign marketplaces compete unfairly by ignoring consumer protection and product safety obligations that EU-registered sellers must observe.
The decision also has implications for other global marketplace operators. Its parent company, Alibaba, reached a separate $600 million settlement with the US Department of Justice earlier this month over illegal drug sales on its platforms, bringing combined legal exposure from both jurisdictions to more than $1.2 billion in three weeks. The US settlement covered eight years of conduct; the EU investigation addressed a more recent period, with distinct violations but overlapping themes of compliance inadequacy.
Amazon faces a separate Commission inquiry over similar product safety concerns, one that has not yet produced a formal penalty. The AliExpress ruling establishes that the Commission treats marketplace operators as responsible for goods flowing through their systems, not merely as neutral conduits.
What the Commission has not yet disclosed is the specific performance threshold AliExpress must meet in its October compliance plan, or whether failure to meet that threshold would trigger an automatic escalation toward a second penalty. That ambiguity is the DSA enforcement architecture’s structural weakness: the regulation creates obligations and assigns fines, but relies heavily on platform self-reporting supplemented by periodic Commission audits. The AliExpress investigation took sixteen months from opening to resolution, a timeline that suggests the Commission’s audit capacity is limited relative to the scale of the platforms it oversees.
European consumer organizations welcomed the ruling but cautioned that financial penalties alone rarely force operational transformation. How AliExpress responds between now and October, whether it hires the human reviewers investigators found missing, builds the measurement tools auditors said were absent, and tightens its brand authorization process, will matter more than the fine itself.
AliExpress did not respond to a request for comment at the time of publication. According to Anadolu Agency, the Commission emphasized that testing demonstrated prohibited goods continued appearing in recommendations and advertisements before removal occurred, pointing to a gap between AliExpress’s public commitments and what its systems actually delivered.
