EU Hits AliExpress With €550 Million DSA Fine Over Illegal Product Controls

 

Photo Credit: Photo: Reuters/Jon Nazca

The European Commission on Monday imposed a €550 million ($629 million) fine on Alibaba-owned AliExpress after concluding that the marketplace breached obligations under the Digital Services Act (DSA) by failing to adequately address the spread of illegal and unsafe products. The Digital Services Act is the EU's flagship law governing online platforms, requiring very large services to identify and mitigate systemic risks, including illegal products and harmful content.

The Commission’s Findings

According to the European Commission, the violations centered on the inability of AliExpress to tackle systemic risks on its marketplace. The regulator stated that the platform allowed counterfeit goods, unsafe toys, and dangerous cosmetics to remain online for weeks.

The Commission identified several operational gaps:

• Moderation Gaps: The Commission said AliExpress failed to properly evaluate whether it had sufficient staff to monitor risks and overestimated the effectiveness of its systems in detecting illegal content.

• Algorithmic Impact: The regulator criticized the platform’s recommender and advertising systems, noting that they exacerbated the spread of illegal products.

• Authorization Protocols: The mandatory "brand authorization" system—intended to prevent counterfeit sales—was ineffective, understaffed, and easily circumvented by traders.

• Penalty Enforcement: The Commission stated that the company’s penalty policy was ineffective, resulting in sanctioned businesses continuing to sell illegal products on the platform.

How AliExpress Responded

"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," AliExpress said in an email. The company stated it is currently reviewing the ruling and considering all available legal options.

Market Context

The European Commission reported that AliExpress had 193 million European users last year, compared to 156 million for Shein and 130 million for Temu. EU tech chief Henna Virkkunen stated that one in five Europeans shop once a month from Shein, Temu, or AliExpress. Virkkunen described these failures as dangerous for consumers and unfair to companies that comply with EU rules.

Earlier DSA Enforcement

The European Commission has been enforcing the DSA to hold large online marketplaces accountable:

• Elon Musk’s X: Fined €120 million in December 2025 for DSA violations.

• Temu: Fined €200 million in May 2026 for similar compliance issues.

• AliExpress: Fined €550 million in July 2026.

The Commission noted that the relative novelty of the DSA served as a mitigating factor in calculating the fine, which could have reached 6% of the company's global annual turnover.

Compliance Timeline

Under the terms of the decision, AliExpress must submit a plan for remedial measures by October 20, 2026. The Commission will then evaluate these proposals to determine if they sufficiently align with DSA requirements. AliExpress retains the option to challenge the decision through formal legal procedures.

Sources: Reuters; European Commission.

File photo: AliExpress logo. Photo: Reuters/Jon Nazca

Correction Policy: This report is based on the European Commission's announcement on July 20, 2026. Any future legal developments or official responses will be reflected in subsequent updates to this article.

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