Chinese e-commerce platform AliExpress was hit with a penalty surcharge of about 930 billion won in the European Union (EU) for failing to prevent the distribution of illegal and counterfeit goods.
The European Commission said on the 20th (local time) that AliExpress, an online distribution platform affiliated with Alibaba Group, violated the EU Digital Services Act (DSA) and that it would impose a fine of 550 million euros (about 930 billion won).
The commission determined that despite AliExpress operating its own product management system, illegal and dangerous goods continued to be sold on the platform, including counterfeit clothing and shoes, children's products that do not meet safety standards, and cosmetics that may contain harmful ingredients.
In particular, it took issue with the fact that AliExpress did not sufficiently put in place risk management and product verification procedures to prevent consumer harm.
Henna Virkkunen, vice president of the commission, said, "The spread of counterfeit clothing, unsafe toys, and dangerous cosmetics is not an expense consumers should bear in online shopping," and noted, "This is the result of failing to properly fulfill the obligations required by the DSA."
The commission said AliExpress did not secure enough dedicated staff to filter products with potential illegality, and that inspection staff were overburdened with excessive workloads. It added that there were also cases where certain problematic products were displayed or promoted through the platform's recommendation algorithm until they were removed.
The DSA is an EU regulation that requires large online platforms to prevent the distribution of illegal content and goods and to strengthen user protection measures. For violating corporations, a penalty surcharge corresponding to a certain percentage of revenue can be imposed.
AliExpress must submit a corrective plan to the commission by Oct. 20 to remedy the violations. The EU plans to review the submitted plan and whether it is actually implemented thereafter.