AliExpress hit with record $629M EU fine for counterfeits
The European Commission imposed its largest-ever Digital Services Act penalty on AliExpress, adding to a string of recent regulatory costs for parent Alibaba that highlight the growing financial risks for Chinese e-commerce platforms in Western markets.
The European Commission fined AliExpress €550 million ($629 million) on Monday for failing to block counterfeit and unsafe products, marking the largest penalty levied under the EU’s Digital Services Act.
The sanction underscores the material financial exposure tech platforms face under Brussels' stringent content moderation rules. It follows a €200 million fine for rival Temu earlier this year and a $120 million penalty for Elon Musk’s X last year, signaling that regulators are willing to impose heavy costs for non-compliance.
“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. “Scale is not an excuse; risks must be identified and addressed systematically to ensure consumers can safely shop online. Today, we are holding AliExpress to this standard and request it to take action,” she added.
AliExpress signaled a potential legal challenge to the penalty. The company said it "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." It also criticized 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."
The fine addresses compliance failures that persisted until at least June 2025, when the commission issued a preliminary ruling and accepted initial improvement commitments from the company. AliExpress now has until Oct. 20 to submit a formal action plan detailing how it will systematically remedy the risk-assessment breaches.
For investors, the fine adds to a rapidly mounting regulatory burden for Alibaba. Less than three weeks ago, the Hangzhou-based tech giant agreed to pay $600 million to the U.S. government to resolve allegations that it sold and imported illegal pharmaceuticals and regulated chemicals into the country. Combined, the two Western regulatory actions represent over $1.2 billion in sudden liabilities, suggesting compliance costs will remain a significant drag on the company's international expansion strategy.
