The European Commission has fined AliExpress a record €550 million for failing to curb the sale of illegal, unsafe, and counterfeit products on its platform. The penalty, issued under the Digital Services Act on July 20, 2026, marks the latest enforcement action against major Chinese e-commerce retailers operating in the European Union.
Regulatory Failure and the Digital Services Act
The European Commission imposed the €550 million penalty after finding that the Alibaba-owned marketplace consistently failed to meet its obligations under the Digital Services Act (DSA). The legislation, which came into force in 2024, requires very large online platforms to actively identify and mitigate risks associated with harmful content and illegal goods.
According to Euractiv, the investigation—which began in March 2024—revealed that AliExpress failed to implement sufficient safeguards to prevent the circulation of counterfeit items, unsafe toys, and dangerous cosmetics. Despite having internal policies that banned such goods, the company’s enforcement mechanisms proved ineffective. The Commission found many illegal products remained active on the platform for weeks, even after they had been flagged for removal.
Operational Shortcomings in Moderation
The Commission’s findings highlighted significant gaps in the company’s human and systemic moderation capabilities. Officials noted that the platform’s internal risk assessments were flawed, and the company failed to allocate enough staff to handle the volume of potentially illegal listings. Human moderators were sometimes given just tens of seconds
to review product reports, a timeframe the regulator deemed insufficient for assessing compliance with EU safety standards.
The regulator further criticized the platform’s reliance on a single quantitative metric to measure moderation effectiveness, which it argued allowed illegal goods to reappear in similar forms. Additionally, the brand authorisation
system, designed specifically to stop the sale of counterfeit merchandise, was described as understaffed and easily circumvented by traders who misclassified their products to avoid scrutiny.
Comparative Enforcement: X and Temu
This penalty is the largest issued under the DSA to date, surpassing previous fines leveled against other major platforms. The €550 million figure is significantly higher than the €200 million fine issued to Temu in May and the €120 million penalty handed to X in December last year.
Despite the record amount, the fine represents less than 1% of the €122 billion in revenue generated by Alibaba last year. Under the DSA, the Commission technically had the authority to impose a fine of up to 6% of the company’s global annual turnover.
AliExpress Response and Compliance Obligations
AliExpress has rejected the Commission’s findings, characterizing the penalty as excessive. The company maintained that the fine does not accurately reflect the improvements it has already implemented.
“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. We are carefully reviewing the decision and considering all available options.”
AliExpress
The company now faces an October 20, 2026, deadline to submit an action plan outlining how it will address the Commission’s concerns. The EU executive will then decide within two months of receiving the plan whether further action is required.
Broader Market Context for Chinese Retailers
The fine arrives as the EU intensifies its scrutiny of Chinese cross-border e-commerce giants. The regulatory environment is hardening, with the bloc recently introducing a €3 flat duty on small parcels valued under €150. This change is expected to significantly affect the business models of Chinese online retail giants AliExpress, Shein, and Temu.
EU tech chief Henna Virkkunen emphasized the scale of the issue, noting that approximately one in five Europeans shop on these platforms at least once a month. With 193 million users in Europe last year, AliExpress remains the largest of the three platforms, and the Commission has signaled that it intends to hold these companies to the same safety and transparency standards as any other major online retailer operating within the bloc.
Sources: RTE, The Guardian.
