The European Commission on Tuesday fined Chinese online marketplace AliExpress €550 million (NZ$1.074 billion) for failing to adequately crack down on the sale of unsafe and counterfeit products on its site.
The fine, the biggest ever imposed for breaches of the 27-nation European Union's Digital Services Act, comes just months after another online retailer, Temu, was fined €200 million (NZ$390 million) for similar breaches. Last year, Brussels issued a US$120 million (NZ$205 million) penalty for Elon Musk’s social media site X.
"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," Henna Virkkunen, the commission's executive vice-president for tech sovereignty, security and democracy, said in a statement.
"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.
In a comment emailed to The Associated Press, AliExpress said that since the DSA came into force the company "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 said it disagreed with 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 was for 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 under the DSA, and when it accepted commitments by AliExpress to improve its systems.
The commission said that AliExpress now has until October 20 to submit an action plan setting out measures to "remedy the breach of its obligations to assess and mitigate systemic risks".
The Digital Services Act is designed to keep users safe online and stop the spread of harmful content that’s either illegal or violates a platform’s terms of service, such as promotion of genocide or anorexia. It also looks to protect Europeans' fundamental rights like privacy and free speech.
Monday’s announcement in Brussels also comes less than three weeks after AliExpress' operator, Chinese tech giant Alibaba, said it will pay US$600 million (NZ$1.027 billion) to resolve a dispute with the US government over allegations that the Hangzhou-based firm sold and imported illegal pharmaceuticals, controlled substances, regulated chemicals and pill-making equipment into the US.
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