EU fines AliExpress €550m over illegal goods

The European Commission has fined AliExpress €550 million for failing to stop the sale of illegal, unsafe and counterfeit products on its marketplace. The penalty, issued on Monday, marks the latest escalation in formal proceedings launched in 2024 over potential breaches of the EU’s Digital Services Act.

This fine arrives just days after the bloc implemented a €3 flat duty on parcels valued under €150, ending a long-standing duty-free threshold. Together, these parallel actions represent a coordinated regulatory squeeze designed to disrupt the high-volume business models of Chinese online retail giants AliExpress, Shein and Temu.

Regulators found that AliExpress severely underestimated the gap between its human moderation capacity and the immense scale of its product listings. Malicious traders exploited this weakness by misclassifying items to bypass stricter compliance checks. Consequently, large volumes of dangerous cosmetics and unsafe toys continued to circulate, remaining online for weeks even after being flagged.

The Commission also identified critical failures in how the platform policed its own sellers. Stores faced no meaningful consequences for distributing illegal goods, remaining active even after receiving sanctions. Additionally, the company’s brand authorization system, intended to block counterfeit items, was deemed too weak to prevent abuse by dishonest sellers.

For the broader e-commerce sector, this ruling signals a definitive end to Europe's tolerance for lax marketplace enforcement. To maintain access to European consumers, platforms must now internalize the heavy costs of aggressive risk assessment and robust content moderation, eroding the pricing advantages that defined their rapid expansion.

AliExpress has until 20 October 2026 to present an action plan detailing how it will resolve these systemic failures. The Commission will then decide within two months if further penalties are necessary.

Disputing the ruling, AliExpress stated it has invested substantial resources in consumer protection. "We disagree with today’s decision and the disproportionate fine, which does not adequately reflect our established framework and the significant, proactive enhancements we have made," the company said. "We are carefully reviewing the decision and considering all available options."