**AliExpress Fined €550 Million by EU for Sale of Illegal Products**
In a significant enforcement action, the European Union has imposed a record fine of €550 million (£467 million) on Chinese online retail giant AliExpress for failing to adequately prevent the sale of illegal products on its platform. This penalty marks the largest fine issued under the EU's Digital Services Act, which mandates that tech companies take robust measures to combat illegal and harmful content.
The European Commission's investigation, which spanned two years, revealed that AliExpress did not meet its obligations under the Digital Services Act to "diligently assess" the risks associated with illegal, unsafe, or counterfeit goods available on its site. The Commission highlighted that AliExpress's detection systems were ineffective, allowing numerous illegal products to remain undetected. Furthermore, products that were flagged as illegal often stayed on the platform for several weeks, and the company failed to enforce penalties against traders selling these goods.
Henna Virkkunen, the Commission's Executive Vice President for Tech Sovereignty, Security and Democracy, emphasized that the scale of AliExpress's operations does not excuse the sale of dangerous or illegal items. "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," she stated.
AliExpress, which boasts a user base of 193 million in Europe, more than its competitors Shein and Temu, has expressed its disagreement with the ruling. The company described the fine as disproportionate, arguing that it does not accurately reflect its established compliance framework and the proactive measures it has implemented to enhance its processes. In a statement, AliExpress confirmed that it is currently reviewing the decision and considering all available options.
As part of the penalty, AliExpress is required to pay the fine and submit a comprehensive plan to the EU by October 20, detailing the steps it will take to address the identified breaches. This action follows previous fines issued under the Digital Services Act, including a €200 million penalty against Temu for similar violations and a €120 million fine against Elon Musk's platform X for misleading practices related to account verification.
The Digital Services Act allows for fines of up to 6% of a company's global revenue. While the €550 million fine is substantial, it falls short of the maximum potential penalty for Alibaba, AliExpress's parent company, which reported a global turnover of €122 billion last year.
The enforcement of the Digital Services Act is part of the EU's broader strategy to regulate online platforms and ensure user safety. The Commission's actions reflect an increasing scrutiny of online marketplaces and their responsibilities in preventing the sale of illegal and harmful products. As investigations continue, including one currently underway into Shein, the EU is signaling its commitment to holding tech giants accountable for their role in the online marketplace.
This landmark ruling against AliExpress underscores the EU's determination to create a safer online shopping environment and protect consumers from the risks associated with illegal products.