Alibaba fined record €550m by EU for illegal sales

Alibaba Group Holding’s e-commerce service was fined €550 million ($629 million) by the European Union for selling illegal products in the largest penalty under the bloc’s content moderation rulebook.

AliExpress failed to properly evaluate unsafe or counterfeit products sold on its platform and didn’t take steps to enforce its penalty policy against vendors that repeatedly violated it, the European Commission, the EU’s executive arm, said in a statement Monday.

The commission had been investigating the Chinese company for a list of grievances under the Digital Services Act, or DSA, since 2024 and escalated the probe last year.

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Europe has become increasingly assertive with the DSA since it fully took effect in 2024, targeting social media companies and online marketplaces with investigations and penalties. The first two fines levied under the law were €120 million against Elon Musk’s X in December and €200 million against Chinese e-commerce giant Temu in May.

AliExpress sold products which didn’t meet EU environmental and safety standards, according to Henna Virkkunen, the commission’s executive vice president in charge of tech matters. “This is very dangerous for our consumers but also unfair for companies that are complying with all of our rules,” she told reporters in a briefing.

“We disagree with today’s decision and the disproportionate fine, which does not adequately reflect our established framework and the significant, proactive enhancements we have made,” an AliExpress spokesperson said in a statement. The company is reviewing the decision and will consider its options, the spokesperson added.

The decision was based on 2023 and 2024 risk assessment reports, according to the commission statement. Regulators took into account the novelty of the DSA as a mitigating factor when calculating the fine.

AliExpress has until October 20 to present a plan to remedy its failure to assess and mitigate systemic risks. Regulators will then have two months to adopt a final decision and set up a time frame to implement the plan.

The DSA requires companies with more than 45 million EU users to survey and mitigate risks arising on their online platforms. Violations can lead to fines as high as 6% of a company’s annual global sales.

Alibaba earned some $144 billion in revenue in its last fiscal year.

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