EU Imposes Record $629 Million Fine on AliExpress for Selling Dangerous Counterfeit Goods

The European Union has levied an unprecedented fine of 550 million euros (approximately $629 million) against AliExpress, the popular e-commerce platform owned by Alibaba Group. The penalty, announced on July 20, 2026, follows repeated failures by AliExpress to prevent the sale of illegal, counterfeit, and hazardous products on its site, which remained available for weeks. This is the third fine issued under the EU's groundbreaking Digital Services Act (DSA), which mandates large online platforms to actively combat harmful content and products.

AliExpress has been under scrutiny since June 2025 for not meeting DSA requirements to assess and reduce risks related to prohibited goods. The EU has set a deadline of October 20 for AliExpress to implement significant corrective measures, with potential further sanctions if these are deemed insufficient by December. EU Technology Commissioner Helena Virkkunen emphasized the danger to consumers and unfair competition faced by compliant companies. Last year, AliExpress had 193 million users in Europe, surpassing competitors Shein and Temu.

The EU investigation revealed serious management failures, including inadequate staffing for risk assessment, overreliance on a single quantitative metric to measure filtering effectiveness, and flawed recommendation algorithms that worsened the spread of illegal products. The platform's brand approval system was also ineffective, allowing sellers to circumvent controls and continue offering counterfeit items. Despite these findings, the EU noted the DSA's relative novelty as a mitigating factor in the fine's size.

The fine comes amid AliExpress's declining sales in China and efforts to attract international consumers, particularly in Israel, where it recently revamped shipping and tax policies to improve customer experience. These changes include direct VAT collection at checkout for orders above $75 and enhanced parcel pickup options, aiming to reduce delays and costs.

A key issue is the ease with which counterfeit goods are sold through secret social media groups that share special codes to bypass platform filters. Laboratory tests have found these fake products often contain harmful chemicals, posing health risks. While Israeli authorities conduct random customs inspections and enforce strict controls on high-risk items like cosmetics and toys, many counterfeit goods for personal use evade detection. Consumers can seek refunds through AliExpress dispute mechanisms if misled.

This fine significantly exceeds previous EU penalties under the DSA, such as the 120 million euro fine against X (formerly Twitter) and 200 million euros against Temu. AliExpress had previously avoided a heavier fine last year by agreeing to address illegal content. The coming months will reveal whether AliExpress's global and local reforms can restore its standing or if harsher penalties will follow, threatening its European market position.