AliExpress: EU Commission Imposes €550 Million Fine Under the DSA

Specifically, this involves counterfeit clothing, unsafe toys, and dangerous cosmetics that unlawfully remained on the platform for weeks without being removed. Tests by Brussels-based internet monitors had shown that, despite the company's monitoring efforts, a large number of counterfeit T-shirts, shoes, and unsafe children's toys were circulating, the Commission said.

According to the EU Commission, some sellers who should actually have been punished by AliExpress for selling illegal products got off scot-free. "Sie hätten ihr Geschäft oft weiterbetreiben können," the authority criticized. Overall, the company had not done enough to protect consumers in the EU from such products.

Highest DSA Fine, but Far Below the Maximum

The proceedings fall under the Digital Services Act (DSA), which has been in force since February 2024. Under the DSA, large platforms can be fined up to six percent of the parent company's global annual revenue. According to the European Commission, the annual revenue in question for the Alibaba Group was around 120 billion euros, putting the theoretical maximum fine at over seven billion euros.

While the fine for AliExpress is the highest under the DSA to date, as an EU official explained. But it remains well below the possible maximum fine of over seven billion euros, the official continued. The penalty range is therefore far from exhausted.

EU Digital Commissioner Henna Virkkunen said that AliExpress's behavior endangered consumers in Europe, but was also unfair to companies that complied with all laws. The Commission therefore justifies its move not only on consumer protection grounds, but also on the protection of rule-abiding competitors.

Concessions Were Not Enough for the Commission

Just over a year ago, the Chinese online retailer had already made concessions to the EU. The company intended in particular to take action against illegal and potentially dangerous products such as medicines and dietary supplements. The EU Commission had initially accepted these commitments from the company, but did not consider all of its criticisms addressed.

AliExpress now has until October 20 to submit an action plan for improvements to Brussels. Should the EU Commission be satisfied with the proposed measures, it will set a deadline by which they must be implemented. If the Brussels authority considers that AliExpress is not cooperating sufficiently in the matter, the EU could also impose daily penalties.

The case is part of a series of proceedings against Asian online retailers. At the end of May, the EU Commission imposed a 200-million-euro fine on Temu – also for the sale of illegal products. Consumers in the EU had been highly likely to encounter illegal items on Temu, the Brussels authority had said at the time.

Temu Is Also Under Pressure

Independently of this, since this month the EU has been charging a fee of three euros for every parcel with a goods value of up to 150 euros. This customs charge directly affects the business models of providers such as AliExpress and Temu, which ship particularly large numbers of small parcels from Asia into the EU. The combination of customs duties and sanctions under the DSA significantly increases the pressure on the platforms.

AliExpress belongs to the Alibaba Group. According to the EU Commission, the fine of 550 million euros now imposed is the highest penalty notice issued under the Digital Services Act against a single company to date. While the final sum is therefore noticeable, it is moderate in relation to the possible maximum.