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EU Fines Alibaba's AliExpress EUR550 Million Over Illegal Product Risks

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The European Commission has fined Alibaba's (HKG:9988) AliExpress 550 million euros for breaching its obligations under the Digital Services Act related to assessing and mitigating the risks of illegal, unsafe and counterfeit products on its e-commerce platform.

The Commission said the marketplace failed to adequately assess the risk of illegal products, according to a Monday press release.

It overestimated the effectiveness of its moderation systems and did not devote sufficient staff to reviewing potentially illegal listings. The regulator also found AliExpress failed to effectively mitigate those risks.

It cited shortcomings in the platform's systems for detecting illegal products, enforcing penalties against offending sellers, conducting product compliance checks and preventing the sale of counterfeit goods.

The Commission ordered AliExpress to submit an action plan by Oct. 20 detailing measures to address the violations.

AliExpress, in a statement, said it was "surprised" by the decision and the "disproportionate fine" and disagreed with the findings.

The company said the decision overlooks its risk management framework and the enhancements it has implemented, adding that it will appeal the ruling.

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