EU Turns to Online Marketplaces After Record AliExpress Fine

The European Commission on Monday fined AliExpress €550 million for failing to adequately assess and mitigate the risks posed by illegal, unsafe and counterfeit products on its platform — the largest penalty issued to date under the Digital Services Act, and the third overall.

The fine surpasses the €200 million penalty against Temu in May and the €120 million against Elon Musk's X in December 2025.

AliExpress, which had 193 million European users last year, called the decision disproportionate and said it is reviewing its options.

“AliExpress has been and continues to be committed to meeting our obligations to consumers. We invest substantial resources in risk assessment and mitigation, product safety and consumer protection,” AliExpress said in a statement to Tech Policy Press. The company said it had worked constructively with the European Commission in the spirit of cooperation and transparency, but the fine ignored its “sound risk management framework and the significant, proactive enhancements.”

The Commission said AliExpress failed to properly evaluate whether it had enough resources to monitor potentially illegal products, overstated the effectiveness of its detection and removal systems, and did not adequately consider how its recommendation and advertising tools could increase the visibility of illegal goods.

Investigators found examples of counterfeit products, unsafe toys and potentially dangerous cosmetics remaining available on the platform after being flagged.

“The spread of counterfeit clothing, unsafe toys, dangerous cosmetics and other illegal and harmful products is not an unavoidable cost of shopping online,” said Henna Virkkunen, the European Commission’s executive vice president for tech sovereignty, security and democracy.

“Scale is not an excuse; risks must be identified and addressed systematically to ensure consumers can safely shop online,” she added.

From social media to marketplaces

The AliExpress decision reflects a broader shift in the EU’s enforcement focus under the DSA, moving beyond social media platforms toward online marketplaces that facilitate the sale of physical goods.

Early DSA cases largely centered on content and transparency issues on platforms such as X and Meta. The AliExpress and Temu cases involve products that regulators say may pose direct safety concerns for consumers.

The European Board for Digital Services identified illegal products sold through online marketplaces as one of the most persistent systemic risks across designated platforms in its second annual risk report, published July 1.

The report highlighted challenges including sellers who attempt to evade platform controls by modifying listings or returning under new identities after products are removed — a problem also cited by the Commission in its AliExpress investigation.

The regulatory challenge for marketplaces is therefore not only to remove individual listings but also to demonstrate that their systems can identify and prevent recurring risks at scale.

Three Chinese platforms under scrutiny

All three major Chinese e-commerce platforms operating in Europe are now facing some form of DSA oversight.

Temu, which was fined in May, must submit an action plan to the Commission by Aug. 28. Shein is currently facing formal proceedings over alleged shortcomings involving illegal products, addictive design features and recommendation system transparency, although no fine has been issued. One in five Europeans shops from the three platforms at least once a month, Virkkunen told reporters.

The enforcement actions are taking place alongside separate EU trade measures affecting low-value imports. A new €3 customs charge on parcels valued below €150 from China took effect July 1, targeting a different part of the same cross-border commerce system.

From penalty to compliance

The AliExpress fine does not conclude the DSA process.

Under the law, the company must submit a plan outlining how it will address the Commission's findings. The Board will then provide an opinion, followed by a Commission decision setting out the implementation timeline. If AliExpress fails to comply with the final requirements, the Commission can impose additional periodic penalty payments.

The process will test how the EU's enforcement model works after penalties are issued. In the case of X, the company submitted an action plan following its December fine covering advertising transparency and researcher data access. The Board raised concerns that some proposed measures were insufficient, but the Commission accepted the plan after additional clarifications. The case highlighted the separate roles of the Board, which provides independent opinions, and the Commission, which makes final enforcement decisions — and the gap that can open between the two.

AliExpress also has prior form here. It's June 2025 binding commitments with the Commission have resolved several open investigation strands covering recommender systems, advertising transparency and trader traceability. Those commitments did not prevent Monday's fine, which covered broader concerns about the platform's risk assessment and mitigation systems. The Commission found the commitments lacked specific, measurable targets and external verification mechanisms.

The Commission also noted that the relatively early stage of DSA enforcement was taken into account when calculating the penalty — meaning future cases could involve higher sanctions.

The next test is whether AliExpress’s corrective measures deliver changes beyond written commitments. The case highlights a central feature of the DSA, which focuses not only on whether illegal content or products are removed but also on whether platforms have systems capable of identifying and reducing risks before harm occurs.

The approach places greater emphasis on internal governance, risk assessments and transparency around platform operations. The Commission has also pointed to the role of external scrutiny in identifying risks. Consumer groups and researchers have raised concerns about products sold through online marketplaces, including complaints from BEUC, the European consumer organization, that contributed to the Commission’s proceedings against Temu.

The Board’s second annual report found that outside actors consistently identified risks that platform self-assessments missed, a gap that AliExpress’s October plan will need to address.

What happens next

AliExpress must submit its remedial action plan by Oct. 20. The Board will have one month to issue its opinion, followed by a further month for the Commission to adopt a final decision and establish an implementation timeline.

Temu's earlier deadline on Aug. 28 will provide the first indication of how the Commission evaluates post-fine compliance plans from marketplace platforms — and how much weight the Board's opinion carries when the two institutions disagree.

Shein remains under investigation. Any further action would add another major compliance process to the Commission's workload as it continues building the enforcement framework for the DSA. Whether that process produces structural change or paper commitments is what the second half of 2026 will show.

This article was updated to include a comment from AliExpress.