AliExpress under Fire: EU Commission Threatens Heavy Fine for Violating Digital Services Act
EU Commission warns AliExpress of potential significant penalty
Let's get down to the nitty-gritty of the recent drama between AliExpress and the EU Commission. The Chinese e-commerce giant has been under the microscope for some time now, accused of selling counterfeit branded products, goods contaminated with chemicals, and other illegal merchandise.
The Commission has its nose bent out of shape because AliExpress isn't doing enough to stop the sale of prohibited products via its platform. This includes everything from counterfeit goods to fake medicines, unsafe food, and dietary supplements that could potentially harm consumers.
Despite a series of promises from AliExpress, Brussels remains unimpressed. The platform has limited resources to control offers on the platform and remove them when rules are violated, according to the Commission. Furthermore, penalties for traders who offer prohibited products are rarely enforced, Brussels assesses.
The Skinny on AliExpress's Promised Improvements
To be fair, AliExpress has been making some efforts to clean up its act. The company has committed to implementing stricter control of medicines and dietary supplements, and ensuring influencers don't peddle dangerous products through an advertising program.
Advertisements are now clearly marked as such on the platform, and AliExpress has also agreed to publish information about the algorithms behind product recommendations on the website, as well as provide general data to scientists.
The Stick: Heavy Fines Await
However, these concessions haven't been enough to appease the Commission. While EU officials praised the "constructive" cooperation with the Chinese company, if AliExpress fails to meet the Commission's expectations after further negotiations, the company could face a fine of up to six percent of its global annual turnover.
Experts Weigh In: Watch Out for Cheap Copies on Other Platforms
The European consumer protection organization Beuc has implored the Commission to closely monitor the promised improvements on the platform, citing concerns about other online traders like Temu. The EU Commission is already bringing proceedings against Temu for potential violations of online trading rules.
The Bottom Line: What AliExpress, Temu, and Other Platforms Need to Watch Out For
The European Union has accused AliExpress of violating specific regulations under the Digital Services Act (DSA), including failure to adequately assess and mitigate risks related to the dissemination of illegal products, insufficient enforcement of penalties against traders, systemic failures in content moderation systems, inadequate protections preventing exposure of minors to illegal content, and non-compliance with transparency and trader traceability requirements.
Under the DSA, very large online platforms like AliExpress face fines of up to 6% of their worldwide revenue if they are found in breach of their obligations. The Commission may also issue a formal non-compliance decision requiring AliExpress to implement an approved plan to rectify the identified infringements, and there's even a risk of market restrictions within the EU if the platform continuously disregards the law.
In summary, AliExpress is under fire for breaching the Digital Services Act by allowing illegal products and content to circulate on its platform without adequate risk mitigation and enforcement. The consequences include fines up to 6% of global turnover and potential operational restrictions in the European market if the platform fails to comply with regulatory requirements. The Commission has accepted AliExpress’s commitments as a step toward compliance, but monitoring and enforcement will continue.
- The employment policy of AliExpress, in light of the Digital Services Act violation, could be under review as part of the general-news discussion to ensure compliance and prevent future infringements, particularly in regard to content moderation and risk mitigation.
- Finance and business experts are keeping a close eye on the EU Commission's proceedings against AliExpress, as aside from potential fines up to 6% of its global annual turnover for Digital Services Act violations, the company's standing in the European business market could be impacted by continued non-compliance.
