AliExpress Fined €550 Million by EU for Failing to Curb Counterfeit Products

Failure to Protect Consumers

According to the European Commission, AliExpress failed to adequately mitigate systemic risks associated with its marketplace, allowing dangerous items—including counterfeit clothing, unsafe toys, and hazardous cosmetics—to remain available to consumers for weeks. Henna Virkkunen, the EU’s executive vice-president for tech sovereignty, security and democracy, stated that the prevalence of these goods is not an unavoidable consequence of online shopping, but rather a failure by the platform to meet its legal obligations.

"Scale is not an excuse; risks must be identified and addressed systematically to ensure consumers can safely shop online," Virkkunen said. Officials emphasized that the fine was not triggered by the mere presence of illegal goods, but by the platform’s systemic failure to implement effective barriers and mitigation measures to protect users.

Operational and Systemic Deficiencies

The investigation, which spanned more than two years, identified several critical lapses in how AliExpress operates:

• Inadequate Staffing: The Commission found that the company did not employ enough staff to review risks. Moderators were reportedly pressured to make compliance judgments in as little as 10 to 20 seconds.
• Flawed Algorithms: Regulators criticized the platform’s recommender and advertising systems for exacerbating the spread of illegal products.
• Ineffective Enforcement: AliExpress’s penalty policy was deemed ineffective, as vendors who were penalized for selling illegal items were often able to continue selling on the platform.
• Circumvented Safeguards: The company’s "brand authorisation" system, designed to prevent counterfeit sales, was found to be easily bypassed by traders through simple mis-categorization of products.

Response and Next Steps

AliExpress has formally announced its intent to appeal the decision, describing the penalty as "disproportionate." In a statement, the company argued that the fine ignores its "sound risk management framework" and the "significant, proactive enhancements" it has already implemented. The company maintained that it remains committed to meeting its obligations to consumers and is currently reviewing the Commission’s decision.

The European Commission has set an October 20 deadline for AliExpress to submit a comprehensive action plan detailing how it will remedy these systemic failures. Should the regulator determine in December that the proposed measures are insufficient, the company could face further penalties.

Context Within the Digital Services Act

This decision marks the third time the Commission has issued a fine under the DSA. The €550 million penalty is significantly higher than previous sanctions, including the €200 million fine handed to rival marketplace Temu in May and the €120 million penalty issued to Elon Musk’s social media platform, X, last December.

While the €550 million figure represents the largest DSA fine to date, it remains well below the maximum potential penalty, which could have reached 6% of the company’s global annual turnover.

The findings follow a series of commitments accepted by the Commission in June 2025, which settled many of the suspected breaches identified when the probe was first opened in March 2024. Despite those initial efforts, the Commission concluded that the company’s subsequent compliance measures remained insufficient to protect European consumers.

Sources: Reuters, Bloomberg.com.