AliExpress Hit With $629 Million EU Fine Over Sales of Illegal, Counterfeit Products

 AliExpress Hit With $629 Million EU Fine Over Sales of Illegal, Counterfeit Products

**The record penalty—the largest ever imposed under the Digital Services Act—sends a clear message to online marketplaces: "Scale is not an excuse."**

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## The Largest Fine in DSA History

On Monday, July 20, 2026, the European Commission levied a record **€550 million ($629 million)** fine against Chinese e-commerce giant AliExpress for failing to adequately crack down on the sale of unsafe and counterfeit products on its platform. The penalty is the largest ever imposed under the EU's landmark Digital Services Act (DSA), surpassing the €200 million fine handed to rival Temu in May and the €120 million penalty against Elon Musk's X in December.

The fine stems from a two-year investigation launched in March 2024, which concluded that AliExpress had systematically failed to meet its obligations under the DSA to "diligently assess and mitigate" risks related to the sale of illegal, unsafe, and counterfeit products. The penalty covers conduct by the company until at least June 2025, when the Commission issued a preliminary ruling that found AliExpress was not doing enough to tackle the sale of illegal products.

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## The Violations: What AliExpress Got Wrong

The Commission's investigation uncovered a series of systemic failures that allowed illegal products to flourish on the platform.

### Inadequate Risk Assessment

AliExpress failed to properly evaluate whether it had sufficient staff to review the risks of illegal products circulating on its platform. Senior Commission officials revealed that reviewers were often given just **ten to twenty seconds** to assess potentially illegal product reports—a timeframe that made meaningful moderation nearly impossible.

The company also overestimated the effectiveness of its detection and removal systems, and its recommender and advertising algorithms were found to exacerbate the spread of illegal products.

### Products Stayed Online for Weeks

AliExpress's detection systems "did not work properly," according to the Commission. Many illegal products ranging from counterfeit clothing to unsafe toys and dangerous cosmetics remained online for multiple weeks—even after being detected.

### Ineffective Penalty Policies

The Commission found that AliExpress did not properly implement its penalty policies against traders who repeatedly sold illegal products. Penalized merchants were able to continue selling illegal products on the platform.

### A "Broken" Brand Authorization System

AliExpress's mandatory "brand authorization" system—intended to prevent counterfeit sales—was described as **"ineffective and understaffed"** and could be easily circumvented by traders selling fake products. Compliance checks could be bypassed simply by miscategorizing products.

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## The Human Impact: Why This Matters

The scale of the problem is staggering. At the end of 2025, AliExpress had approximately **193 million monthly active users in the EU**—more than rivals Shein (156 million) and Temu (130 million). One in five European consumers shops on these Chinese platforms at least once a month.

**"The spread of counterfeit clothing, unsafe toys, dangerous cosmetics and other illegal and harmful products is not an unavoidable cost of shopping online—it is a failure by AliExpress to comply with its obligations under the Digital Services Act,"** said Henna Virkkunen, the Commission's executive vice-president for tech sovereignty, security and democracy.

**"If these companies are selling illegal products online, it means that millions of our users are then buying these products,"** she warned.

The Commission's message was unequivocal: **"Scale is not an excuse; risks must be identified and addressed systematically to ensure consumers can safely shop online"**.

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## AliExpress's Response: "Disproportionate"

AliExpress pushed back against the penalty, calling it **"disproportionate"** and arguing that it does not reflect the company's compliance framework or the improvements it has made.

In a statement, the company said: *"Since the DSA came into force, AliExpress has been, and continues to be, firmly committed to meeting our obligations and we have invested substantial resources in risk assessment and mitigation, product safety and consumer protection"*.

The company added: *"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. We are carefully reviewing the decision and considering all available options"*.

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## The EU's Escalating Crackdown on Chinese E-Commerce

The AliExpress fine is part of a broader EU crackdown on Chinese e-commerce platforms operating in Europe. In May 2026, Temu was fined **€200 million** for similar DSA violations. Shein is currently facing an ongoing probe.

The timing is notable. Monday's announcement comes less than three weeks after AliExpress's parent company, Alibaba, agreed to pay **$600 million** to resolve a dispute with the U.S. government over allegations that the firm sold and imported illegal pharmaceuticals, controlled substances, and pill-making equipment into the U.S..

The DSA allows for fines of up to **6% of a company's global annual turnover**. With Alibaba generating €122 billion in global revenue last year, the €550 million fine represents **less than 1%** of what the Commission could have imposed. The Commission said it considered the gravity, nature, duration, and mitigating circumstances when setting the penalty.

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## What Comes Next

AliExpress now has until **October 20, 2026**, to submit an action plan setting out measures to "remedy the breach of its obligations to assess and mitigate systemic risks".

The Commission will review the plan in December 2026. If it determines that AliExpress has not adequately addressed the concerns, the company could face **further penalties**. Failure to comply with the non-compliance decision may lead to periodic penalty payments.

For AliExpress, the €550 million fine is a significant financial hit—but the real cost may be reputational. As the Commission made clear, the era of "scale as an excuse" for failing to protect consumers is over.

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## Frequently Asked Questions

### Q: How much was AliExpress fined?

A: The European Commission fined AliExpress **€550 million ($629 million)** —the largest penalty ever imposed under the Digital Services Act.

### Q: Why was AliExpress fined?

A: AliExpress was fined for failing to adequately assess and mitigate risks related to the sale of illegal, unsafe, and counterfeit products on its platform. Specific failures included inadequate staffing, ineffective detection systems, a broken brand authorization system, and failure to enforce penalties against repeat offenders.

### Q: How does this compare to other DSA fines?

A: This is the largest DSA fine to date. It surpasses the €200 million fine against Temu (May 2026) and the €120 million fine against Elon Musk's X (December 2025).

### Q: When will AliExpress have to comply?

A: AliExpress has until **October 20, 2026**, to submit an action plan. The Commission will review it in December, and further penalties could follow if compliance is inadequate.

### Q: What does AliExpress say about the fine?

A: AliExpress called the fine **"disproportionate"** and said it does not reflect the company's compliance framework or the improvements it has made. The company is reviewing the decision and considering its options.

### Q: How many users does AliExpress have in Europe?

A: At the end of 2025, AliExpress had approximately **193 million monthly active users** in the EU—more than Shein (156 million) and Temu (130 million).

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## Conclusion: A Warning to the Industry

The €550 million fine against AliExpress is more than just a penalty for one company—it's a warning to the entire e-commerce industry. The European Commission has made it clear that **the DSA is not optional**, and that platforms cannot hide behind their scale when it comes to protecting consumers from illegal and counterfeit products.

For AliExpress, the fine is a financial blow and a reputational challenge. But the company has been given a path to redemption: a concrete action plan, due by October 20, that must demonstrate genuine commitment to fixing the systemic failures identified by the Commission.

For consumers, the message is one of hope. The EU is finally holding online marketplaces accountable for the safety of the products they sell. **"The spread of counterfeit clothing, unsafe toys, dangerous cosmetics and other illegal and harmful products is not an unavoidable cost of shopping online,"** Virkkunen said.

The era of unchecked e-commerce may finally be coming to an end.

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## Disclaimer

**IMPORTANT:** This article is for informational and educational purposes only and does not constitute financial, investment, legal, or professional advice. The information contained herein is based on publicly available sources and reflects the author's understanding as of the publication date. The AliExpress fine, the DSA, and related enforcement actions are subject to change. You should consult with qualified professionals before making any decisions based on this information.

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*Published: July 20, 2026*

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**Tags:** AliExpress, EU fine, Digital Services Act, DSA, counterfeit products, European Commission, Henna Virkkunen, Alibaba, e-commerce regulation, consumer protection, Temu, Shein, online marketplace, illegal products, product safety