The European Commission has fined AliExpress €550 million for breaching the Digital Services Act, saying the online marketplace failed to adequately assess and reduce the risk of illegal, unsafe and counterfeit goods being sold to European consumers.

The decision is one of the most consequential enforcement actions taken under the EU’s platform-safety law. It tests whether Brussels can use rules originally associated with harmful online content and algorithmic accountability to change how large e-commerce marketplaces police physical products.

The Commission said AliExpress fell short in multiple areas of its obligation to assess systemic risks and did not take effective measures to reduce the spread of illegal products. The concerns cover goods that may be counterfeit, dangerous or prohibited, including products capable of posing health and safety risks.

Under the Digital Services Act, the largest online platforms must identify major risks created by their services and show that they have taken proportionate steps to address them. The rules can apply to recommender systems, advertising, consumer deception and the availability of unlawful goods.

Brussels has ordered AliExpress to take corrective action. Continued failure to comply could expose the company to periodic penalty payments in addition to the €550 million fine.

The Financial Times reported that AliExpress considers the penalty disproportionate and intends to appeal. The company has also been required to submit a risk-mitigation plan, placing the next stage of the case on whether it can convince regulators that its controls are becoming more effective.

The decision sends a clear message that Europe’s platform rules apply not only to speech and algorithms, but also to the physical products delivered to consumers.

The enforcement action also fits a wider pattern of scrutiny directed at fast-growing Chinese e-commerce platforms. European regulators have become increasingly concerned about the volume of low-cost parcels entering the single market, product-safety standards and the difficulty of identifying responsible sellers.

For consumers, the practical issue is whether prohibited or dangerous listings are removed before purchases are made, rather than after complaints or injuries. For platforms, the challenge is monitoring millions of sellers and listings without treating scale as a defence for weak controls.

The case will be watched by other major marketplaces because it sets a high financial benchmark for Digital Services Act enforcement. If the penalty survives appeal, it will strengthen the Commission’s claim that the law can impose meaningful costs when platforms fail to manage systemic risks.