The European Commission has levied a record €550 million ($629 million) fine against Chinese e-commerce giant AliExpress, marking the largest penalty ever imposed under the EU’s Digital Services Act (DSA).

The fine, announced on July 20, 2026, comes after a lengthy investigation that uncovered widespread failures by the Alibaba-owned platform to police counterfeit and dangerous products sold to European consumers.

What the Investigation Found

Regulators opened their probe into AliExpress in March 2024 over suspected breaches of the DSA, which requires large online platforms to actively combat illegal and unsafe products. Investigators discovered “millions” of counterfeit products, unsafe toys, and dangerous cosmetics available for sale — many of which remained on the platform even after being flagged.

According to the European Commission, AliExpress lacked sufficient staffing to perform proper oversight. Employees responsible for screening products reportedly had just “tens of seconds” to decide whether items met EU safety standards.

“The spread of counterfeit clothing, unsafe toys, dangerous cosmetics and other illegal and harmful products… is a failure by AliExpress to comply with its obligations under the Digital Services Act.”

— Henna Virkkunen, EC Executive Vice-President for Tech Sovereignty, Security and Democracy

A Landmark DSA Penalty

The €550 million fine is the largest ever imposed under the DSA, which came into force in 2024 and applies to the world’s largest online platforms. The size of the penalty reflects both the scale of the problem and AliExpress’s failure to take adequate measures to address it.

“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,” Virkkunen said.

AliExpress Responds

AliExpress condemned the fine as disproportionate, though it has not confirmed whether it plans to appeal the decision.

“We disagree with today’s decision and the disproportionate fine, which does not adequately reflect our established framework and the significant, proactive enhancements we have made,” the platform told The Guardian in a statement. “We are carefully reviewing the decision and considering all available options.”

Broader Implications

This record fine signals that European regulators are taking an increasingly aggressive stance toward large e-commerce platforms under the DSA framework. The regulation grants EU authorities the power to impose fines of up to 6% of a company’s global annual turnover for systemic failures.

For AliExpress, which serves millions of European consumers, the financial hit is substantial — but the reputational damage and regulatory scrutiny may prove even more significant. The case also serves as a warning to other global marketplaces operating in Europe that compliance with local product safety laws is non-negotiable.

As regulators continue to ramp up enforcement of the DSA, the AliExpress case is likely to become a defining precedent in the ongoing battle between consumer protection and the scale-driven economics of global e-commerce platforms.