AliExpress fined €550 million by European Commission under DSA

The European Commission have just fined AliExpress €550 million for breaching its obligations under the Digital Services Act (DSA) due to the sale of illegal, unsafe or counterfeit products on it’s platform. The Commission has also ordered the platform to take action and given them until the 20th of October to submit an action plan to the Commission.

So what did they do wrong? Well they failed to assess the risk of sales of illegal, unsafe, or counterfeit products, and failed to take effective measures to reduce the risk.

Not knowing how many staff they needed to police the platform was one failing and they also didn’t properly measure how well their moderation system prevented the risk of illegal products appearing or reappearing in similar forms.

And the Commission said that many illegal products, from counterfeit products to unsafe toys and dangerous cosmetics, circulated on the platform and, even if detected, remained online for multiple weeks.

Plus AliExpress didn’t ban sellers caught selling dodgy goods – their penalty policy was not adequately implemented and stores selling illegal products were able to remain active on AliExpress, despite being penalised.

Then there’s the dodge of listing banned products in the wrong category to try and circumvent any checks and AliExpress’ mandatory ‘brand authorisation’ system – intended to prevent counterfeit sales – proved ineffective and understaffed The action plan mandated by the Commission must set out measures to remedy the breach of its obligations to assess and mitigate systemic risks.

The European Board for Digital Services will have one month from the receipt of the plan to issue its opinion. The Commission will then have a further month to adopt its final decision and set a reasonable period for implementation.

It’s also worth noting that the Commission have already accepted and made binding a series of commitments offered by AliExpress in order to address the majority of the concerns at the basis of the opening of the investigation, such as the notice and action mechanism, the platform’s transparency on advertising and recommender systems.

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.

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. -Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy