The European Commission fined AliExpress 550 million euros for selling "illegal, unsafe or counterfeit products" on its e-commerce platform, according to a press release from the Commission on Monday.

The Commission said the Alibaba Group-owned (HKG:9988) marketplace breached its obligations under the Digital Services Act (DSA) by failing to detect illegal products, enforce penalty policies for merchants selling these products, and prevent the spread of counterfeit goods.

The fine marks the largest penalty issued to date under the bloc's online platform regulation. It follows the 200 million-euro fine imposed on Temu in May and the 120 million-euro fine slapped on social media platform X in December 2025.

Under the EU's DSA, the maximum fine limit for violating the law is up to 6% of a group's annual global revenue.

In response to an MT Newswires email seeking comment, AliExpress disputed the Commission's findings, saying, "We disagree with today's decision and the disproportionate fine, which does not adequately reflect our established framework and the significant, proactive enhancements we have made."

The company said it has been "firmly committed to meeting our obligations and we have invested substantial resources in risk assessment and mitigation, product safety and consumer protection."

AliExpress added that it has invested "substantial resources" in risk assessment and mitigation, as well as product safety and consumer protection.

"We are carefully reviewing the decision and considering all available options," the company added.

AliExpress has until Oct. 20 to submit an action plan to the Commission.

The penalty comes as the EU pushes against low-cost Chinese e-commerce imports. The bloc abolished its 150-euro duty-free threshold for small parcels on July 1, replacing it with a temporary flat 3-euro customs duty per item.

The European Council noted in an earlier explainer that the number of low-value packages -- or those valued at 150 euros -- entering the EU totaled 4.6 billion in 2024, with 91% of those shipments coming from China.