EU Fines AliExpress €550 Million Over Digital Services Act Breaches

Key Takeaways

• €550 Million DSA Fine: The European Commission fined AliExpress €550 million for breaching the Digital Services Act's requirements to assess and mitigate systemic risks associated with illegal products.
• Risk Assessments Found Deficient: Regulators concluded that AliExpress overstated the effectiveness of its moderation systems, underestimated staffing needs, and failed to adequately measure whether illegal products continued circulating on the platform.
• Enforcement Controls Failed: The Commission identified shortcomings in AliExpress' product detection systems, trader penalty enforcement, product categorization checks, and brand authorization process, allowing counterfeit and unsafe products to remain available.

Deep Dive

The European Commission has fined AliExpress €550 million after concluding that the marketplace failed to meet its obligations under the Digital Services Act (DSA) to assess and reduce the risks associated with illegal, unsafe, and counterfeit products sold through its platform.

The penalty follows a lengthy investigation into whether one of the world's largest online marketplaces had built systems capable of keeping pace with the volume of goods flowing through it. The Commission's answer was no. It found repeated failures in the way AliExpress measured risk, monitored its marketplace, and enforced its own rules against sellers offering illegal products.

Officials said the company's shortcomings allowed counterfeit goods, unsafe toys, dangerous cosmetics, and other prohibited products to remain available to consumers despite moderation efforts that AliExpress believed were working more effectively than they actually were.

The Commission Says the Risks Were Misjudged

A big part of the Commission's case focused on how AliExpress assessed systemic risk. Under the Digital Services Act, very large online platforms must identify the risks their services create and demonstrate that they have effective measures in place to reduce them. According to the Commission, AliExpress' assessments painted an overly optimistic picture of its own performance.

The company overestimated the effectiveness of its systems for detecting and removing illegal products while failing to properly account for whether it had enough human moderators to review the volume of listings requiring attention. Regulators concluded that the relationship between staffing levels and moderation workload was not realistically reflected in the company's assessments.

The Commission also found that AliExpress underestimated the role of its recommendation and advertising systems in spreading illegal products. Testing carried out during the investigation found that consumers continued to receive recommendations and advertisements for illegal products before those listings were removed.

Another weakness emerged in the company's use of data. Regulators said AliExpress relied on a single quantitative indicator to measure the effectiveness of its moderation efforts. That metric did not adequately capture whether illegal products continued appearing or reappearing after removal. Commission testing found that large numbers of illegal listings continued circulating despite the platform's moderation systems.

Weak Controls Extended Beyond Risk Assessments

The Commission concluded that the operational controls designed to reduce those risks suffered from many of the same weaknesses. According to the decision, AliExpress' systems for detecting illegal products failed to function effectively. Counterfeit goods, unsafe toys, dangerous cosmetics, and other prohibited products often remained on the marketplace for weeks after they had been identified.

The investigation also found that the platform did not consistently enforce penalties against traders selling illegal products. Sellers that had already been sanctioned were able to continue operating on the marketplace despite violating platform rules.

Product categorization presented another problem. The Commission said traders could deliberately place products in incorrect categories to avoid stricter compliance requirements. AliExpress assigned too few staff to verify product classifications before listings were published, allowing improperly categorized products to pass through existing controls.

Counterfeit goods received particular attention in the decision. AliExpress operates a mandatory brand authorization system intended to prevent counterfeit listings before they reach consumers. The Commission concluded that the system was both ineffective and understaffed. Traders were able to bypass the controls and publish counterfeit products that were removed only after they had already appeared on the platform.

The Commission said it calculated the €550 million penalty by considering the nature of the infringements, the number of affected EU users, and the length of time the violations continued. According to the decision, the failures persisted at least until June 2025, when regulators issued their preliminary findings.

Officials described failures to properly assess systemic risks and to effectively mitigate them as particularly serious violations of the Digital Services Act. The Commission also said it took mitigating circumstances into account, including the fact that the Digital Services Act remains a relatively new regulatory framework.

Compliance Effort Now Moves Forward

AliExpress has until October 20, 2026, to submit an action plan describing how it will remedy the violations identified by the Commission. The European Board for Digital Services will review the proposal and issue an opinion before the Commission adopts a final implementation decision and sets a deadline for compliance. If AliExpress fails to comply with that decision, it could face periodic penalty payments.

The investigation began in March 2024, when the Commission opened formal proceedings covering a broad range of possible Digital Services Act violations, including content moderation, advertising transparency, recommender systems, trader traceability, internal complaint handling, and access to platform data for researchers.

In June 2025, the Commission accepted a series of legally binding commitments from AliExpress addressing several parts of the investigation, including improvements to its notice-and-action mechanisms and greater transparency around advertising and recommender systems. The issues surrounding the assessment and mitigation of systemic risks associated with illegal products remained unresolved and ultimately became the basis for the Commission's decision.

Executive Vice-President for Tech Sovereignty, Security and Democracy Henna Virkkunen said the spread of counterfeit clothing, unsafe toys, dangerous cosmetics, and other illegal products should not be viewed as an unavoidable consequence of online shopping. Platforms operating at AliExpress' scale, she said, are expected to identify those risks systematically and address them before consumers are exposed to them.

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