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AliExpress fined record €550m by EU for allowing sale of illegal products

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Why This Matters

The record €550 million fine imposed on AliExpress highlights the EU's increasing focus on holding online marketplaces accountable for illegal and unsafe products. This case underscores the importance for tech companies to strengthen their compliance systems and enforce stricter controls to protect consumers and adhere to regulations. It also signals a broader push within the tech industry toward greater responsibility in managing online content and product safety.

Key Takeaways

Chinese online retail giant AliExpress has been fined a record €550m (£467m) by the EU for allowing the sale of illegal products such as unsafe toys and fake clothes.

The European Commission said AliExpress has fallen short of its legal obligations "diligently assess" the risk of illegal, unsafe or fake goods 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.

AliExpress said the fine was disproportionate and that it has made changes to its systems.

The two year investigation found that AliExpress's detection systems "did not work properly", with many illegal products not flagged while others that were identified remained on the site for several weeks.

The European Commission also found the company did not properly enforce penalties on traders selling illegal goods.

Furthermore, its product compliance checks could be "easily circumvented".

AliExpress, which is owned by the Chinese tech conglomerate Alibaba, has 193 million users in Europe, more than fellow Chinese online retailers Shein or Temu.

The penalty is the highest fine imposed under the Digital Services Act, which requires tech giants to do more to counter illegal and harmful content.

The act allows for fines of up to 6% of a company's revenue, but as Alibaba had a global turnover of €122bn last year, the penalty is far short of that.

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