EU investigates AliExpress for breaching digital services regulations

In March 2024, the European Union commenced a formal investigation into AliExpress, a prominent Chinese e-commerce platform owned by Alibaba, for potential violations of the Digital Services Act (DSA). The investigation was initiated due to concerns that AliExpress had not sufficiently addressed the risks associated with the sale of illegal products on its platform. Reports from the European Commission indicated that AliExpress's measures to curb the spread of illegal goods were inadequate and that the platform had systemic failures in its content moderation systems. The Commission underscored the company’s ongoing issues with counterfeit items and unsafe products sold through its website. As the investigation progressed, preliminary findings suggested that AliExpress had not enforced an effective penalty policy against traders who repeatedly post illegal content. This raised significant red flags for regulators who are keen on ensuring consumer safety and compliance with EU laws. They pointed out that AliExpress had to improve its moderation systems and combat the manipulation of its platform by malicious traders who exploit loopholes to sell illicit goods. The findings not only highlighted non-compliance with the DSA but also emphasized the need for better enforcement mechanisms within the online marketplace. The European Commission's investigation particularly focused on types of products that were illegal, dangerous, or counterfeit. This scrutiny was part of a broader strategy by Brussels to ensure that online marketplaces operate under strict guidelines that prioritize consumer safety and trust. The Commission's actions were also reflective of its broader regulatory efforts targeting large tech platforms—entities with over 45 million monthly users in Europe—ensuring they adhere to rules surrounding the sale and promotion of products on their platforms. Moving forward, AliExpress was permitted to review the Commission's findings and respond in writing. If they continue to be deemed non-compliant, the company could face fines reaching up to six percent of its global turnover. The situation exemplifies the EU's robust approach to regulating digital markets and enforcing compliance among tech giants, and the resolution of this matter could significantly impact how AliExpress operates in European markets moving ahead.