• AliExpress fined €550 million for selling illegal and counterfeit products.
• This is the highest fine under the EU's Digital Services Act.
• The European Commission stated that AliExpress failed to adequately assess and mitigate risks.
• The company must develop a corrective action plan by October 20.
• The fine reflects overarching compliance issues faced by large online platforms.

The European Union has imposed a record €550 million fine on AliExpress for its failure to adequately combat the sale of illegal and counterfeit products on its platform. This penalty, the largest enacted under the EU's Digital Services Act (DSA), follows a thorough investigation that revealed significant non-compliance with regulations requiring online platforms to mitigate risks associated with illegal goods being sold. Specifically, the European Commission noted that many illegal products, including unsafe toys and counterfeit clothing, remained on AliExpress for weeks without action, according to Reuters, The Local, and BBC.

EU officials emphasized that AliExpress' systems for detecting illegal products were inadequate, which allowed the continued sale of numerous unsafe items. Henna Virkkunen, the Commission's Executive Vice President, stated that the spread of unsafe products is "not an unavoidable cost of shopping online," stressing that AliExpress' scale should not excuse its failures. The findings highlight that AliExpress did not sufficiently enforce penalties against vendors selling illegal goods, nor did it implement effective checks on product compliance, as reported by The Local and Le Monde.

The fine marks the third significant enforcement action taken under the DSA, following €120 million and €200 million fines levied against Elon Musk's X social media platform and e-commerce competitor Temu, respectively. Moving forward, AliExpress is required to develop a comprehensive action plan by October 20 to address these compliance issues. Should the company fail to meet this deadline, it may face additional penalties, as noted by Reuters and BBC.

AliExpress, part of the Alibaba Group, is the biggest Chinese e-commerce platform operating in Europe, with a user base of 193 million. The magnitude of the fine reflects serious concerns about consumer protection and market fairness within the EU's digital marketplace. According to the Commission, the DSA aims to ensure that online platforms systematically assess and mitigate potential risks associated with illegal products, emphasizing that compliance is crucial for maintaining a safe shopping environment, as articulated by Le Monde and The Local.