EU cracks down on AliExpress: €550 million in fines
Illegal products, lax checks and no penalties for offending retailers. The EU has now had enough: Aliexpress is being made to pay up.
AliExpress is facing a hefty fine. Following a lengthy investigation, the European Commission has imposed a fine of 550 million euros on the online retailer. Aliexpress has breached the Digital Services Act in several respects and, despite repeated promises to the contrary, has failed to make sufficient improvements.
What has Aliexpress done?
AliExpress falls under the VLOP (very large online platform) category and therefore has a number of specific obligations designed to protect customers from the European Union. According to the European Commission, the Chinese online shop has either failed to fulfil these obligations or has done so inadequately. Specifically, the authority has criticised the following points:
- Third-party sellers have sold illegal goods on Aliexpress and have received no punishment, or punishment that was not strict enough, for doing so.
- The range of products on sale on the platform is not monitored closely enough and illegal products are not being removed. The EU attributes this to a shortage of staff.
- The products in question were repeatedly displayed to customers by the algorithm or even actively promoted before Aliexpress had removed them.
- During inspections by the EU, large quantities of counterfeit branded goods – T-shirts, shoes and untested children’s toys – were repeatedly found to have been dispatched.
Source: nordicevs.no
This puts customers at risk and puts companies that abide by the rules at an economic disadvantage.
Highest DSA fine to date
Aliexpress must pay 550 million euros. This is the highest fine imposed to date under the Digital Services Act. Nevertheless, it is significantly lower than it could theoretically have been. A fine of up to six per cent of the Alibaba Group’s total global annual turnover would have been possible. That would amount to around seven billion euros. Recently , Temu was also fined. In that case, the fine was 200 million euros.
Aliexpress must submit a plan to the Commission by 20 October setting out how the company intends to comply with the DSA requirements in future. If this is accepted, there will be a deadline for its implementation. Otherwise, further fines will be imposed. Meanwhile, Aliexpress has announced that it does not intend to accept this decision. It claims the fine is disproportionately high. The company intends to challenge the decision in court.
I've been tinkering with digital networks ever since I found out how to activate both telephone channels on the ISDN card for greater bandwidth. As for the analogue variety, I've been doing that since I learned to talk. Though Winterthur is my adoptive home city, my heart still bleeds red and blue.
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