Alibaba's AliExpress Receives Largest-Ever Digital Services Act Fine: $630 Million Over Unsafe Goods

The ease of buying almost anything from a phone has rewritten the habits of an entire generation of shoppers. A few taps can summon a child’s toy, a bottle of face cream, or a new jacket from a warehouse on the other side of the planet, often at a price that makes the local high street look expensive. 

For many Europeans that convenience has become ordinary, almost invisible, part of the weekly routine. One in five people across the continent now shops every month on platforms built around this model of distant warehouses and ultra-low prices. 

The goods arrive, the money leaves the account, and the transaction feels complete. What remains largely out of sight is the long chain of decisions that decided whether those goods were safe enough to sell in the first place.

And now, that chain of decisions came under the sharpest scrutiny yet. 

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European Union
The European Commission has imposed a record fine of €550 million to Alibaba's AliExpress

The European Commission imposed a fine of €550 million, roughly US$630 million, on AliExpress, the marketplace operated by China’s Alibaba Group (full official decision: https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1654).

It is the largest penalty the bloc has ever issued under its Digital Services Act, the sweeping set of rules designed to hold the biggest online platforms responsible for the risks they create. 

Regulators concluded that AliExpress had failed, systematically and over a prolonged period, to keep illegal and dangerous products off its European shelves. 

Unsafe toys that could injure children, cosmetics containing banned or hazardous substances, counterfeit clothing that misled buyers about brand and quality, and a range of other non-compliant goods continued to circulate long after they should have been removed.

The Commission’s investigation painted a picture of systems that were never equal to the volume of listings they were meant to police. 

Product reviewers were given only tens of seconds to assess flagged items. Sellers learned to miscategorise goods so that they slipped past automated checks. When illegal products were spotted and taken down, many reappeared within days or weeks and sometimes stayed online for more than a month. 

The platform’s own rules promised penalties against traders who repeatedly broke the rules, yet those penalties were rarely applied with any consistency.

Recommender algorithms and advertising tools, designed to push products toward potential buyers, often amplified the very listings that should have been suppressed. In the Commission’s view these were not isolated lapses but structural failures. 

Scale, officials insisted, could not serve as an excuse.

Henna Virkkunen, the Commission’s executive vice-president responsible for technology policy, summarised the finding in plain language. 

The spread of counterfeit clothing, unsafe toys, dangerous cosmetics and other illegal products is not an unavoidable cost of shopping online. 

It is a failure by the platform to meet its legal obligations. 

Risks must be identified and addressed systematically if consumers are to shop with any real confidence. The fine itself was accompanied by a requirement that AliExpress submit a detailed action plan by 20 October setting out how it intends to close the gaps that regulators identified (Commission’s formal order: https://digital-strategy.ec.europa.eu/en/news/commission-fines-aliexpress-eu550-million-breaching-digital-services-act).

The company responded that it was surprised by the size of the penalty and considers it disproportionate. 

Since the Digital Services Act took effect, AliExpress says it has invested heavily in risk assessment, product safety tools and consumer protection measures. It maintains that its European market is still far smaller than its domestic Chinese business and that the Commission did not give sufficient weight to the improvements already under way. 

The company is reviewing the decision and examining its options, a standard formulation that leaves open the possibility of an appeal.

The case did not appear overnight. 

Scrutiny of AliExpress under the DSA began in earnest in 2024. By June 2025 the Commission had already ordered the platform to correct serious shortcomings in the way it handled illegal products. 

When those ordered changes failed to produce the expected results, the formal fine followed in July 2026. 

Earlier penalties under the same law look modest by comparison. 

Temu received a fine of around 200 million euros for related failings. The social media platform X was ordered to pay roughly €120 million for different breaches. The AliExpress decision therefore marks a clear escalation in both the size of the financial consequence and the intensity of enforcement directed at large online marketplaces.

Behind the numbers sits a larger tension that European regulators have been trying to resolve for several years. 

Platforms that source goods from complex, fast-moving supply chains can offer prices that traditional retailers struggle to match. 

The same speed and volume that create those prices also make thorough safety checks difficult. Counterfeit and substandard products have always existed in physical markets, yet the digital version multiplies both the reach and the anonymity of the sellers. 

When a dangerous toy or a bottle of contaminated cream can be listed, paid for and shipped before any human has looked at it carefully, the ordinary safeguards that once operated in shops and customs halls are weakened. 

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AliExpress
AliExpress is a massive global e-commerce marketplace owned by the Alibaba Group. Launched in 2010, it connects international buyers directly with manufacturers and small businesses, primarily based in China. Unlike its sister site, Alibaba.com, which handles bulk business-to-business (B2B) transactions, AliExpress functions as a business-to-consumer (B2C) store where users can purchase single items at wholesale prices

The Digital Services Act was written in part to restore those safeguards by placing clear duties on the platforms themselves rather than leaving the burden entirely on individual consumers or national inspectors.

AliExpress has already signalled disagreement with the Commission’s assessment and will almost certainly challenge both the findings and the size of the penalty. 

Other large platforms that operate under similar models will be watching closely, calculating how much additional investment in moderation and compliance is now required to avoid similar outcomes. 

Shoppers, meanwhile, continue to face the same daily choice between price and caution. 

The cheapest listing is still only a click away. 

What has shifted is the official expectation that the companies hosting those listings must treat the hidden risks as seriously as the visible profits.