Home
News
EU Fines AliExpress €550 Million in Record DSA Penalty

EU Fines AliExpress €550 Million in Record DSA Penalty

News2026-07-21

On July 20, 2026, the European Commission officially announced a massive €550 million (approximately $630 million) fine against AliExpress, the cross-border e-commerce platform owned by Chinese tech giant Alibaba. The penalty sets a new record since the Digital Services Act (DSA) came into force in 2022, targeting the platform's long-standing failures in controlling counterfeit and unsafe products.

Three Major Violations
The penalty stems from a formal investigation launched by the EU in March 2024. The Commission identified three systemic shortcomings on AliExpress.

First, serious failures in risk assessment. AliExpress failed to properly assess and mitigate the risks of selling illegal, unsafe, and counterfeit goods. It overestimated the effectiveness of its systems for detecting and removing illegal products and failed to adequately consider the severe imbalance between the number of human moderators and their workload.

Second, illegal products were difficult to remove and were actively promoted. The investigation found that a large number of illegal products—ranging from counterfeits to unsafe toys and dangerous cosmetics—were circulating on the platform. Even when detected by the system, they remained online for weeks. More seriously, non-compliant products continued to be recommended by the algorithm before removal.

Third, ineffective enforcement against non-compliant sellers. Fraudulent merchants took advantage of looser categorization requirements by deliberately misclassifying products to evade supervision. AliExpress's mandatory "brand authorization" system, designed to prevent counterfeit sales, was found to be ineffective and understaffed. Penalties against violators were poorly enforced, allowing some non-compliant stores to continue operating even after being sanctioned.

Henna Virkkunen, EU Commissioner for Digital Affairs, stated: "We found a large number of counterfeit products, as well as dangerous toys and dangerous cosmetics, which continued to be sold on the platform for a long time." She emphasized that the penalty aims to force the platform to systematically address online consumer risks, with the fine amount reflecting the nature of the violations, the broad impact affecting 193 million EU users, and the duration of the misconduct.

AliExpress Responds: Penalty "Disproportionate," Considering Appeal
In response to the penalty, AliExpress official statement said the amount was "disproportionate" and failed to objectively reflect the compliance systems already built and remediation efforts undertaken. The company stated: "Since the entry into force of the DSA, AliExpress has been firmly committed to fulfilling its obligations and will continue to do so." It is currently uating appeal options and other responses.

The Commission has required AliExpress to submit a corrective action plan by October 20, 2026, outlining remedial measures. Failure to submit the plan on time or to implement adequate fixes could result in periodic penalty payments.

EU's Regulatory Trilogy: from X to Temu to AliExpress
A horizontal comparison shows the EU's tightening regulatory stance: Elon Musk's social platform X was fined €120 million at the end of 2025 for failing to meet DSA transparency obligations; at the end of May this year, Pinduoduo's Temu was fined €200 million for allowing illegal products to circulate. AliExpress's penalty not only far exceeds both but also sets a new historical high.

It is worth noting that another Chinese-backed e-commerce platform, SHEIN, is also currently under the EU's investigative spotlight. All three platforms—AliExpress, SHEIN, and Temu—have large user bases in the EU and have been designated as "Very Large Online Platforms," subject to strict DSA oversight.

Jian Junbo, Deputy Director of the Center for China-Europe Relations at Fudan University, analyzed that this case highlights the EU's increasingly stringent approach to digital regulation. The DSA has become a key tool for regulating major digital platforms, and in recent years, several large US tech companies have also faced investigations and penalties. For AliExpress, this fine is not only a financial blow but also sends a signal—the cost of compliance in the European market will continue to rise.

Industry Impact: Compliance Costs Soar, Full-Chain Risk Control Overhaul in Sight
Market analysts believe this landmark penalty will significantly raise the compliance costs for Chinese cross-border e-commerce platforms operating in Europe, forcing them to comprehensively upgrade their end-to-end risk control systems—from product review to algorithmic recommendation.

Over the past few years, Chinese cross-border e-commerce platforms have expanded rapidly in Europe through supply chain efficiency and price advantages, but their compliance systems have lagged behind. In recent months, the EU has introduced a series of measures to protect its market, including the imposition of a minimum €3 tax on imported small parcels starting July 1. Commissioner Virkkunen denied that AliExpress was targeted because of its country of origin, stating that "everyone who wants to do business in Europe must follow the same rules."

The regulatory confrontation between China and the EU in cross-border e-commerce is likely to intensify further. For Chinese platforms expanding in the European market, this €550 million "wake-up call" reminds them that scale growth cannot come at the expense of compliance—and compliance capability itself is becoming a critical threshold that determines who gets to stay at the table.

Core Services

News

EU Fines AliExpress €550 Million in Record DSA Penalty