China's AliExpress risks fine for breaching EU illegal product rules

Chinese online giant AliExpress must do more to protect consumers from illegal product sales, the European Commission said Wednesday in an interim finding that could open the way to heavy fines.

While noting some progress, "the Commission preliminarily found AliExpress in breach of its obligation to assess and mitigate risks related to the dissemination of illegal products" under the EU's Digital Services Act (DSA), a statement said.

The EU opened a formal investigation in March 2024 into AliExpress, which is owned by Alibaba, for multiple suspected breaches of DSA rules on countering the spread of illegal goods and content online.

The commission's preliminary findings concluded that "AliExpress fails to appropriately enforce its penalty policy concerning traders that repeatedly post illegal content".

It also highlighted "systemic failures" in AliExpress's moderation systems that expose it to "manipulation by malicious traders", and said the firm's own risk assessments underestimated the dangers linked to illegal products.

Those findings were "in breach of the obligations" that the DSA imposes on very large platforms -- such as AliExpress, Facebook and Instagram -- with more than 45 million monthly European users, the commission said.

AliExpress now has the right to examine the commission's findings and reply in writing.

If AliExpress is confirmed to be in non-compliance with the DSA, the commission could impose a fine of up to six percent of the firm's global turnover.

The EU has developed a powerful armoury to regulate Big Tech with the milestone DSA and a sister law, the Digital Markets Act, that hits web giants with strict curbs, obligations and oversight on how they do business.

It took action against AliExpress after identifying likely failings to prevent the sale of fake medicines, prevent minors seeing pornography, stop affiliated influencers pushing illegal products, and other issues including data access for researchers.

In its statement Wednesday, the commission said AliExpress had taken a series of legally binding measures to remedy those concerns.

Steps included improvements to its systems for detecting illegal products such as medicines and pornographic material, notably goods spread through hidden links and affiliate programmes.

The commission also said AliExpress had addressed concerns regarding the flagging of illegal products, the handling of internal complaints, ad transparency, the traceability of traders and research access to data.

Source: AFP