AliExpress was fined 550 million euros by the European Commission, presenting a viable opportunity for legal recourse. This case serves as a warning to Chinese companies going global to closely monitor local legislative and enforcement changes, and to proactively manage and adjust their operational risks.
On July 20, 2026, the European Commission (EC) imposed a fine of 550 million euros (approximately 42.5 billion RMB) on Alibaba's cross-border e-commerce platform, AliExpress, under the Digital Services Act (DSA). This is the largest penalty issued since the DSA came into effect.
The DSA, a digital platform regulation law that took effect in February 2024, together with the Digital Markets Act (DMA), forms the framework for EU digital regulation. The law imposes layered obligations based on platform size, requiring all hosting service providers to establish content reporting and notification mechanisms. “Very Large Online Platforms” (VLOPs), with over 45 million monthly active users, must fulfill the strictest systemic obligations, including annually assessing and mitigating systemic risks such as the spread of illegal goods, disinformation, and infringement of fundamental rights. They must also undergo transparency reviews and independent audits, and allow regulators access to their algorithms. The EC can directly fine non-compliant platforms up to 6% of their global annual turnover, and in severe cases, may require them to cease operations in the EU.
Amazon, Google, Meta, TikTok, Temu, and AliExpress have all been designated as VLOPs. Prior to this, two other platforms were penalized under the DSA. On December 5, 2025, X was fined 120 million euros for violating transparency obligations, marking the first DSA penalty. On May 28, 2026, Temu was fined 200 million euros for failing to fulfill its systemic risk assessment duties.
On July 22, the Chinese Ministry of Commerce spokesperson responded to the AliExpress fine, expressing “strong dissatisfaction and serious concern,” and clearly stating that “China will firmly support Chinese companies in using legal weapons to defend their rights and will take strong measures to resolutely safeguard corporate interests.”
Why Was AliExpress Fined?
The EC's investigation into AliExpress began on March 14, 2024. At that time, the EC initiated formal proceedings to assess whether AliExpress violated the DSA in areas such as risk assessment and mitigation, content moderation, internal complaint handling mechanisms, transparency of advertising and recommendation systems, merchant traceability, and researcher data access. As a VLOP with approximately 193 million users in the EU, AliExpress bears the strictest tier of systemic risk assessment and mitigation obligations.
On June 18, 2025, the EC accepted a series of remedial commitments from AliExpress regarding most of the investigation items, including notification and action mechanisms, and transparency of advertising and recommendation systems, thereby concluding these matters via “commitment decisions.” However, the EC issued preliminary findings, tentatively concluding that AliExpress was non-compliant in assessing and mitigating systemic risks related to the spread of illegal products.
On July 20, 2026, the EC issued its penalty decision, determining that AliExpress had failed to prudently assess and effectively mitigate risks related to the sale of illegal, unsafe, or counterfeit products on its platform.
In calculating the fine, the EC considered the nature of the violation, the extent of harm to EU consumers, the duration of the violation (lasting at least until June 2025), and took into account the turnover of AliExpress's parent company, Alibaba. Mitigating factors were also considered, such as the short implementation time of the DSA and the fact that the relevant rules were still in the industry adaptation phase.
Despite this, the 550 million euro fine remains the largest penalty under the DSA. However, it is far from the maximum penalty of 6% of global annual turnover.
In addition to the fine, AliExpress must submit a remediation plan to the EC by October 20, 2026, detailing the measures it will take to correct its violations in systemic risk assessment and mitigation. Procedurally, the European Digital Services Board will provide an opinion within one month of receiving the plan, followed by a final EC ruling within another month, which will also set the implementation deadline. If AliExpress fails to comply with the ruling, it may face periodic penalty payments.
How to Pursue Legal Recourse?
Following the penalty, a AliExpress spokesperson responded: “We disagree with the decision and this disproportionate fine, which does not adequately reflect our existing framework and the significant, proactive improvements we have already made.” The spokesperson also stated that the company is carefully evaluating the decision and will consider all available options. According to media reports, AliExpress has clearly indicated its intention to appeal the penalty decision.
Under Article 263 of the Treaty on the Functioning of the European Union (TFEU), a company can file a lawsuit with the General Court of the European Union within two months of receiving the penalty decision, seeking to annul or modify the fine. An appeal against the first-instance judgment can be made to the European Court of Justice.
Zhan Kai, a consultant at Beijing Dentons (Shanghai) Law Firm, noted that the core obligations imposed on VLOPs under the DSA, particularly the systemic risk assessment and mitigation duties under Articles 34 and 35, are highly principle-based and open-ended clauses. The law does not provide quantitative standards for what constitutes a “prudent” risk assessment or an “effective” content moderation system, nor has the EC issued specific discretionary benchmarks.
Zhan Kai believes that with such an uncertain obligation standard leading to a record-breaking fine, AliExpress can certainly challenge the decision by invoking the principle of legality and clarity of penalties under Article 49 of the Charter of Fundamental Rights of the European Union. Notably, given that AliExpress had just reached a binding commitment decision with the EC on some charges in June 2025, the platform has grounds to argue that it had a reasonable expectation of compliance for the remaining matters. As the largest DSA penalty to date, this case is a classic “first-of-its-kind” scenario where the court will inevitably assess the boundaries of the new law, thereby leaving room for the penalized company to argue its case.
Yang Jie, a senior partner and international trade compliance expert at Shanghai Huiye Law Firm, stated that there is room for AliExpress to defend its rights, primarily in four areas:
First, the fine is clearly disproportionate. The DSA explicitly states that fines should be based on the nature, gravity, recurrence, and duration of the violation, and must be proportionate to the infringement, with a cap of 6% of the company's global annual turnover. Previously, the EC fined X 120 million euros and Temu 200 million euros under the DSA. The 550 million euro fine against AliExpress is 4.6 times and 2.75 times larger than these two, respectively. Temu and AliExpress are highly similar in business model, EU user base, and platform merchant governance structure, raising doubts about the EC's justification for such a disparity. If AliExpress can prove in court that the nature and severity of its violation were not significantly greater than those of X or Temu, it can argue that the penalty is unreasonable.
Second, the mitigating factor of cooperation during the investigation was not considered. The EC's investigation into AliExpress lasted from March 2024 to July 2026. During this period, AliExpress actively cooperated with the investigation and took measures such as expanding review teams, optimizing algorithmic interception, upgrading merchant authorization systems, and establishing misclassification interception mechanisms. However, the EC's decision did not take these cooperative actions into account, even though “active cooperation with the investigation” itself can serve as a mitigating circumstance.
Third, insufficient evidence was provided to support the penalty. The EC concluded that AliExpress had “systemic issues” based on the presence of non-compliant goods on its platform, but failed to adequately provide evidence of the specific non-compliant goods or whether they caused widespread personal injury, consumer harm, or major safety incidents in the EU market. There is a lack of supporting evidence linking the violation consequences, actual harm, and the high fine.
Fourth, there are procedural defects. During the two-year investigation, the EC unilaterally held inspection reports, backend data, and complete case files, but did not provide them to AliExpress for prior verification. It is debatable whether the penalized party was given sufficient opportunity to submit written defenses and rebuttals regarding key adverse evidence (such as the classification, scope, volume, and consequences of non-compliant goods), and whether its right to a hearing was adequately protected. Previous cases offer precedents; after Meta was fined under the DMA, it argued procedural defects based on the EC's failure to grant the penalized party sufficient hearing rights.
On April 23, 2025, the EC issued the first fines under the DMA. Apple was fined 500 million euros for violating anti-steering obligations, and Meta was fined 200 million euros for its “pay or consent” advertising model. Facing dual pressures of fines and remediation, both Apple and Meta adopted a strategy of “remediating while appealing.”
In June 2025, Apple submitted a compliance plan to relax App Store steering restrictions, just before the fine deadline. On July 7 of the same year, Apple filed a lawsuit with the General Court of the EU to annul the fine, arguing that it was “unprecedented and far beyond the scope of the law.” Apple's arguments focused on the improper expansion of the “steering” concept under the DMA and the mandatory service tiering provisions that exceeded authority by interfering with commercial terms. Apple also initiated multiple parallel lawsuits on matters such as the “gatekeeper” designation.
Meta adopted a similar strategy. After being designated a “gatekeeper” on September 5, 2023, Meta filed a lawsuit with the General Court on November 15, 2023. Following its 200 million euro fine on April 23, 2025, Meta filed an appeal on July 2, 2025, arguing that the EC ignored existing case law from the European Court of Justice regarding “consent-based advertising models.”
In June 2026, the General Court partially annulled the “gatekeeper” designation for some of Meta's services.
However, on July 8, 2026, the General Court fully rejected Apple's challenge to the “gatekeeper” designation, formally confirming the core platform service status of the App Store and iOS. Although Apple can appeal to the European Court of Justice, it is widely believed that the chances of overturning the decision are low.
Zhan Kai noted that, based on statistics from EU competition law fine litigation, full annulment of a fine is a rare event. The more common outcome is a partial victory on procedural or quantum grounds, resulting in a certain reduction in the fine amount.
Zhan Kai also warned that filing a lawsuit does not suspend the execution of the fine. Companies must still pay the fine on time or provide a bank guarantee. Additionally, the obligation to submit a remediation plan continues, and failure to comply could trigger daily periodic penalty payments, capped at 5% of the average daily global turnover. Therefore, the optimal strategy for a company is not to rely solely on litigation, but to pursue a dual approach of “seeking a penalty reduction through litigation while stopping the bleeding through timely remediation.”
Companies Should Proactively Manage Risks
On July 22, the Chinese Ministry of Commerce spokesperson responded to the EU's fine on AliExpress, stating that China has taken note of the situation and expresses strong dissatisfaction and serious concern. China firmly opposes the EU's use of platform regulation as a pretext to create digital barriers, adopt discriminatory measures, and restrict or suppress the normal operations of Chinese e-commerce companies in Europe. China urges the EU to stop exploiting the ambiguity of legal provisions to abuse its discretion and to treat Chinese companies fairly and equitably. China will firmly support Chinese companies in using legal weapons to defend their rights and will take strong measures to resolutely safeguard corporate interests.
In recent years, Chinese platform companies have faced multiple penalties in the EU.
In September 2023, TikTok was fined 345 million euros by the Irish Data Protection Commission for issues related to children's privacy and data transfers. In May 2025, TikTok was again fined 530 million euros by the same body for data transfer issues concerning European users. On May 28, 2026, Temu was fined 200 million euros by the EC under the DSA for inadequate systemic risk assessments. Since February 2026, the EC has been formally investigating SHEIN under the DSA.
US platform companies are also primary targets of EU penalties. Besides X, Meta, and Apple, on July 23, 2026, the EC fined Google 890 million euros under the DMA. Of this, 460 million euros was for Google Search's “self-preferencing,” i.e., favoring its own shopping, hotel, and transportation services in search results; 430 million euros was for Google Play Store's anti-steering restrictions, i.e., prohibiting developers from informing users about cheaper alternative purchasing channels. Google must also rectify its practices within 60 days, or face periodic penalty payments of up to 5% of its average daily global turnover.
Yang Jie believes that the EC's penalties are part of a concentrated enforcement effort and are not based on the nationality of the company. This serves as a warning to Chinese companies going global, especially in countries with strict enforcement like the US and Europe, that they must closely monitor local legislative and enforcement developments and proactively manage and adjust their operational risks.
Zhan Kai believes that the EU's enforcement pace is not entirely neutral. The successive penalties against Chinese platforms reflect the current tensions in Sino-EU trade relations, where the increasing competitiveness of Chinese products has tilted the traditional trade balance in China's favor. The EU is increasingly inclined to use various regulations and enforcement measures to maintain its “ideal trade balance.”
Zhan Kai advises Chinese companies to establish normalized regulatory communication mechanisms with the EU and make good use of the commitment procedures within the DSA. The fact that AliExpress resolved some charges through remedial commitments in June 2025 is a direct example of the value of this mechanism. At the same time, companies should keep their information synchronized with Chinese authorities, allowing individual case handling to coordinate with the pace of bilateral economic and trade communication.