Alibaba Group Holding NYSE:BABA, the Chinese company behind the AliExpress e-commerce marketplace, has been fined 550 million ($629 million) by the European Union after regulators found shortcomings in how the platform handled unsafe and counterfeit products. The penalty is the largest imposed under the bloc's Digital Services Act, potentially increasing investor attention on Alibaba's regulatory exposure in Europe. The European Commission said AliExpress failed to properly assess risks linked to illegal goods and did not adequately enforce penalties against sellers that repeatedly breached its rules.
European regulators also said some products sold through AliExpress did not meet the bloc's environmental and safety standards, creating risks for consumers and disadvantages for businesses that follow EU requirements. The investigation began in 2024 and was intensified last year, with the final penalty based on AliExpress risk-assessment reports covering 2023 and 2024. AliExpress disagreed with the ruling and described the fine as disproportionate, arguing that the decision did not sufficiently recognize its existing framework or the improvements it had made.
AliExpress must submit a plan by Oct. 20 explaining how it will address its failures to assess and reduce systemic risks, after which regulators will have two months to issue a final decision and establish an implementation timetable. The case could matter for Alibaba investors because the Digital Services Act allows fines of up to 6% of annual global revenue, while Alibaba generated about $144 billion in its latest fiscal year. The decision also suggests that European enforcement is becoming more aggressive, following earlier penalties of 120 million against X, the social media platform owned by Elon Musk, and 200 million against Temu, a Chinese e-commerce company.