The European Commission has fined Chinese e-commerce platform AliExpress €550 million ($628 million) for failing to properly assess and reduce the risks linked to illegal, unsafe, and counterfeit products sold on its marketplace.
According to the European Commission, the company breached its obligations under the European Union’s Digital Services Act (DSA), which requires major online platforms to take effective measures against illegal content and products.
Multiple Failures
In its official press release, the European Commission said AliExpress overestimated the effectiveness of its systems for detecting and removing illegal products.
The Commission also found that the company failed to properly assess how its recommendation and advertising systems contributed to the spread of illegal products across the platform.
According to the Commission, AliExpress relied on a single quantitative indicator to measure the performance of its moderation system. However, that indicator did not accurately show whether the system was preventing illegal products from appearing or reappearing in different forms.
Illegal Products Stayed Online for Weeks
The European Commission said AliExpress’ product detection system did not function effectively, allowing many illegal products to remain available on the platform.
Even after some of these products were detected, they reportedly stayed online for several weeks.
The Commission also said AliExpress failed to properly enforce penalties against traders selling illegal products. In addition, sellers were reportedly able to bypass product compliance checks by mislabeling their products.
According to the Commission, these shortcomings meant AliExpress failed to adequately prevent the spread of counterfeit goods.
It further stated that the platform’s mandatory brand authorization system, which was designed to stop counterfeit sales, proved ineffective and understaffed, allowing traders to bypass the system with relative ease.
AliExpress Given October Deadline
The European Commission has given AliExpress until October 20 to submit an action plan outlining how it will address the violations and meet its obligations to assess and mitigate systemic risks under the Digital Services Act.
After receiving the plan, the European Board for Digital Services will have one month to issue its opinion. The European Commission will then have another month to make its final decision and set a reasonable deadline for AliExpress to implement the required measures.
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