EU Fines AliExpress a Record 550m Euro Over Sale of Illegal Goods

The Chinese online retail giant AliExpress has been fined a record €550m (£467m) by the European Union for allowing the sale of illegal products including unsafe toys and counterfeit clothing.

The European Commission said the company had fallen short of its legal obligation to "diligently assess" the risk of illegal, unsafe or fake goods appearing on its platform.

"The spread of counterfeit clothing, unsafe toys, dangerous cosmetics and other illegal and harmful products is not an unavoidable cost of shopping online — it is a failure by AliExpress to comply with its obligations," said EU tech chief Henna Virkkunen.

The two-year investigation found that AliExpress's detection systems "did not work properly". Many illegal products were never flagged, while others that were identified remained on sale for several weeks. The Commission also found the company failed to properly enforce penalties against traders selling illegal goods, and that its product compliance checks could be "easily circumvented".

AliExpress, owned by the Chinese conglomerate Alibaba, has 193 million users in Europe — more than fellow Chinese retailers Shein or Temu — which is what places it in the top tier of platforms subject to the strictest obligations.

The penalty is the largest yet imposed under the Digital Services Act, which requires large technology companies to do more to counter illegal and harmful content. The act permits fines of up to 6% of global revenue. With Alibaba turning over €122bn last year, the theoretical maximum was more than €7bn, making the actual fine a fraction of what the Commission could have levied.

AliExpress said it was surprised by and disagreed with the decision, and will appeal. "AliExpress has been and continues to be committed to meeting our obligations to consumers. We invest substantial resources in risk assessment and mitigation, product safety and consumer protection," the company said. "Today's decision and disproportionate fine ignores our sound risk management framework and the significant, proactive enhancements we have made."

Under the ruling the company must pay the penalty and submit a plan by 20 October setting out what action it will take to remedy the breaches — a requirement that in practice matters more than the money, since it commits the platform to verifiable changes under supervision.

The fine continues a pattern of escalating enforcement. Earlier this year Temu was fined €200m for allowing the sale of illegal products including dangerous baby toys. Last year Elon Musk's X was fined €120m after the Commission ruled that allowing users to pay for blue tick badges was deceptive, because the platform was not "meaningfully verifying" who was behind an account, exposing users to scams.

Consumer groups say the underlying problem persists. The UK group Which? has found online marketplaces still selling dozens of unsafe baby products.

Reported from the BBC.