AliExpress, the leading Chinese online retail platform, has been fined a record €550 million (£467 million) by the EU for permitting the sale of illegal products, including unsafe toys and counterfeit clothing.
According to the European Commission, AliExpress failed to fulfill its legal requirement to “diligently assess” the risks associated with illegal, dangerous, or counterfeit items listed on its marketplace.
EU technical chief Hena Virkunen stated, “The rise of counterfeit apparel, unsafe toys, hazardous cosmetics, and other illegal products is not an unavoidable aspect of online shopping; it reflects AliExpress’s failure to meet its obligations.”
In response, AliExpress labeled the fine as disproportionate, insisting that they have updated their monitoring systems.
The two-year investigation revealed that AliExpress’s detection mechanisms were “ineffective,” with numerous illegal products going unreported, and others identified remaining available for weeks.
Furthermore, the European Commission identified that the company did not adequately enforce penalties on vendors selling illegal goods.
Additionally, the checks for product compliance were found to be “easily circumvented.”
Owned by Alibaba, a Chinese technology powerhouse, AliExpress serves approximately 193 million users across Europe, surpassing competitors like Shein and Temu.
This fine marks the largest penalty ever imposed under the Digital Services Act, compelling technology giants to enhance their efforts against illegal and harmful online content.
Under the law, fines can reach up to 6% of a company’s global profits, but with Alibaba’s reported sales last year amounting to €122 billion, the fine is significantly lower.
AliExpress commented, “We contest today’s ruling and believe the fine is disproportionate. It does not reflect the improvements we’ve implemented within our framework.”
They added, “We are thoroughly assessing this decision and exploring all available options.”
AliExpress has until October 20 to submit a comprehensive plan to the EU outlining how it will address the violations and manage the payment of the fine.
Earlier this year, Temu faced a €200 million fine for also selling illegal products, including hazardous toys for infants.
Additionally, Elon Musk’s X Company was penalized €120 million last year after the commission argued that their paid blue check feature was misleading, as the platform did not “meaningfully verify” account holders, thereby exposing users to potential fraud.
Source: www.bbc.co.uk