EU fines AliExpress 550 mn euros over illegal products

World
By Editor_1
AliExpress is the largest online retail operator in the EU with 193 million users. Photograph: Sheldon Cooper/SOPA Images/Shutterstock

By Lisa O’Carroll

BRUSSELS – The Chinese online retail platform AliExpress has been fined a record €550m (£470m) by the EU over its failure to stop illegal goods including harmful clothing, cosmetics and kitchen gadgets being sold through its site.

The European Commission fine is the biggest imposed by the bloc under Digital Services Act (DSA) legislation to protect consumers from illegal goods and deceptive or addictive marketing techniques.

Henna Virkkunen, the commission’s executive vice-president for tech sovereignty, security and democracy, said: “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.

“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.”

While the fine was much larger than those previously issued under the DSA to Temu (€200m) and X (€120m), it represented less than 1% of the €122bn that AliExpress’s parent company, Alibaba, generated in revenue last year. It could have been fined a maximum of 6% of global annual revenue.

Temu was fined in May for failing to stop the sale of illegal and dangerous products, while X was fined for breaches including what the EU said was a “deceptive” blue tick verification badge given to users and the lack of transparency of the platform’s advertising. Temu is still under EU investigation on other issues and may yet face another fine.

The European Commission found AliExpress did not have enough staff to assess the legality of products, sometimes giving them just “tens of seconds” to judge whether a product met EU standards.

It also found many illegal products were being promoted under AliExpress’s recommendation systems and that the company’s internal risk assessments failed.

“Many illegal products, from counterfeit products to unsafe toys and dangerous cosmetics, circulated on the platform and, even if detected, remained online for multiple weeks,” the commission said.

The size of the fine reflected “the nature and gravity” of the platform’s failure to implement mitigating measures to stop consumers being offered harmful or dangerous goods, a senior commission official added.

AliExpress immediately condemned the fine as “disproportionate”. It said: “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 company said it would “appeal the decision” by the commission, claiming the fine “ignores our sound risk management framework and the significant, proactive enhancements we have made”.

Previous investigations by the EU of a sample of products sold on large retail platforms including Shein found 65% of cosmetics, 63% of food supplements and 60% of personal protection equipment, such as hard hats and steel-toe cap boots for building sites, were non-compliant.

-theguardian.com

Editor_1
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