Key Takeaways
- AliExpress has been fined 550 million euros by the EU for breaching the Digital Services Act.
- The platform allowed the sale of illegal products, including unsafe toys and cosmetics.
- AliExpress failed to stop the sale of counterfeit products and did not adequately address the risks posed by its services.
The European Union has imposed a record-breaking fine of 550 million euros on online retailer AliExpress for breaching the Digital Services Act (DSA). The fine is the largest ever imposed under the DSA, which aims to police big tech companies operating in the EU.
The EU found that AliExpress had allowed the sale of illegal products, including unsafe toys and cosmetics, and had failed to stop the sale of counterfeit goods. The platform had also overestimated the effectiveness of its system in detecting and removing illegal products, and millions of products would reappear after being removed.
Investigation and Fine
The EU launched an investigation into AliExpress in March 2024 and found that the platform had not done enough to address the risks posed by its services. The fine was imposed after the EU found that AliExpress had breached the DSA by failing to evaluate and address the risks posed by its services.
The EU said that the fine took into consideration the nature of the violations, the impact on Europeans, and the duration of the infringements. AliExpress has to pay the fine and present a plan to the EU by October 20 that includes what action it will take to tackle the breaches.
Regulatory Environment
The DSA is part of a strengthened legal framework aimed at reining in the excesses of big tech companies. The EU has stepped up its efforts in recent years to combat what it says is unfair competition from Chinese retailers, including slapping a levy of three euros on cheap parcels entering the 27-nation bloc.
The EU has made it clear that it will not hesitate to take action against companies that breach its regulations, regardless of their origin. The EU is AliExpress' biggest market, and the company has 193 million users in the EU.
Why This Matters
The fine imposed on AliExpress sends a strong message to big tech companies operating in the EU that they must comply with the DSA and take steps to address the risks posed by their services. The EU's actions demonstrate its commitment to protecting consumers and ensuring a fair and safe online environment.