AliExpress is regarded as the Chinese alternative to Amazon. The online shopping giant is also becoming increasingly popular in our part of the world. But now the EU Commission is investigating the company. The accusation: AliExpress could possibly be in breach of DSA regulations.
Formal proceedings against AliExpress
Given its sheer size, with 104.3 million active EU users per month, AliExpress is undoubtedly considered a “Very Large Online Platform” (VLOP). A look at the EU statistics shows that this is by no means the case for every company. In April 2023, a total of only 19 services were classified as VLOPs.
In the EU, this means that the Digital Services Act (DSA), which came into force in October 2022, applies to the marketplace and therefore the regulations contained therein apply to it. The accusation is quite serious. The online mail order company is alleged to have sold pornographic and other unauthorized material. This is prohibited under the DSA, which is why formal proceedings have now been initiated against the subsidiary of Chinese tech giant Alibaba.
Proceedings were preceded by a warning
The VLOPs covered by the DSA are subject to stricter rules than smaller platforms. This means that AliExpress, Amazon and Co. Are not allowed to sell goods that smaller online stores may be allowed to offer. AliExpress appears to have been flouting this ban for some time. After all, the EU Commission had already sent a warning to the online marketplace’s management in the fall of 2023. The EU authority wanted to be informed of the extent to which AliExpress is positioned in terms of consumer protection and the assessment of product risks.
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These take up a lot of space in the DSA. In addition to pornographic goods, it is probably other unauthorized materials in particular that annoy the Commission. Even counterfeit medicines are said to be available to order on the marketplace. AliExpress was apparently unable to respond satisfactorily to this letter with a justification. This appeared to the Commission to be an admission of guilt, as the retailer should have provided evidence to refute the allegations. Accordingly, the EU Commission has now decided to initiate formal proceedings.
AliExpress with inadequate consumer protection?
The EU Commissioner for Competition, Margrethe Vestager, emphasized that “the protection of consumers, especially minors […] is an essential cornerstone of the Digital Services Act”. AliExpress must therefore also minimize systemic risks on its platform. This would ensure that the service is safe to use. The investigation will now show whether the rules of the DSA are being adhered to or not.
In addition to the distribution of questionable goods, other things are also questionable. For example, the marketplace’s affiliate system is somewhat dubious. Influencers sometimes advertise really questionable products. However, AliExpress is not aware of any culpability. The online marketplace emphasizes that it adheres to the market regulations that apply in the respective countries.
The Alibaba subsidiarytold Reuters that it is working with the local authorities to ensure that the DSA regulations are actually adhered to. If the proceedings that have now been initiated reveal any irregularities, the marketplace will not be banned. Nevertheless, it will then have to reckon with a hefty fine amounting to a maximum of six percent of its global annual turnover. That could add up to quite a lot.
