The European Commission's record €550 million ($632 million) fine against Chinese online retailer AliExpress represents the largest penalty issued under the Digital Services Act (DSA) to date. The ruling could mark a turning point for beauty brands battling counterfeit products online, as regulators place greater responsibility on marketplaces to police the products they sell. The Alibaba-owned platform was found to have breached the European Union’s DSA by failing to adequately assess and mitigate the risks associated with illegal, unsafe, and fraudulent products, including contaminated cosmetics.
Regulators also identified shortcomings in AliExpress’ product moderation systems, advertising and recommendation algorithms, seller enforcement, and brand authorization program. While AliExpress has said it will appeal the decision, arguing it has invested significantly in improving its risk management systems, the decision underscores the European Commission’s increasingly aggressive approach to regulating digital platforms.
AliExpress has become one of the world’s largest cross-border e-commerce marketplaces, competing with platforms such as Temu and Shein for value-conscious consumers. Beauty and personal care products are a prominent category on the platform, where international brands sit alongside independent sellers and private-label products. Its scale and cross-border business model make it an important test case for how regulators intend to hold global marketplaces accountable for the products they facilitate.
Although the investigation covered a range of product categories, the Commission’s specific reference to dangerous cosmetics becoming detected and remaining on site for weeks after makes the decision particularly significant for the beauty industry.
Counterfeit skincare, fragrances, and cosmetics have long presented challenges for both brands and consumers, with fake products often bypassing the stringent safety assessments, ingredient regulations, and labeling requirements that govern legitimate cosmetics sold within the European Union. Unlike authorized products, counterfeit cosmetics can contain undisclosed ingredients, contaminants, or unsafe formulations that pose potential risks to consumer health.
Spurious beauty has become an increasingly complex challenge as prestige skincare, fragrance, and cosmetics continue to grow in popularity online. Social commerce, cross-border retailers, and the rapid rise of white-label manufacturing have made it easier for fake products to reach consumers while making enforcement more difficult for both brands and regulators. Unlike traditional retail channels, third-party platforms can host millions of listings from sellers across multiple jurisdictions, creating an environment where counterfeit products can quickly reappear even after they have been removed.
The Commission concluded that AliExpress had failed to implement sufficiently robust systems to identify and mitigate these risks, despite the obligations placed on very large online platforms under the DSA.
Representing a significant shift in how online marketplaces are regulated in the EU, the DSA entered into force across the EU in 2022, with a staggered timeline toward full implementation by 2024. But VLOPs (very large online platforms) and search engines like AliExpress have had to comply with DSA obligations since 2023. Rather than relying solely on reactive takedowns after non-compliant products are reported, the legislation requires platforms to proactively identify systemic risks, strengthen seller oversight, remove repeat offenders, and demonstrate that their recommendation systems are not facilitating the spread of prohibited goods.
The challenge comes as beauty’s distribution model becomes increasingly fragmented. Consumers now discover products through TikTok creators, livestream shopping, and influencer recommendations before purchasing them through cross-border sellers or social commerce platforms. The combination of viral demand, dropshipping, and third-party sellers has made it more difficult for brands to maintain oversight of where products are sold and whether they are authentic, increasing pressure on regulators to modernize marketplace governance.
The AliExpress ruling suggests regulators now expect digital platforms to play a far more active role in protecting consumers, moving responsibility beyond individual sellers and placing greater accountability on the platforms themselves. That shift could have important implications for beauty companies. As retailers invest more heavily in seller verification, product moderation, and anti-counterfeiting technology, brands may benefit from stronger intellectual property protection and faster removal of pirated listings. At the same time, compliance expectations for third-party sellers are likely to increase.
The latest enforcement action follows years of scrutiny over counterfeit goods sold through AliExpress and builds on a formal DSA investigation launched by the European Commission in 2024. The Commission’s latest findings suggest that despite improvements made by the platform, regulators believe significant shortcomings remain in how unregulated products are identified and removed.
The decision also forms part of a broader regulatory crackdown on major online marketplaces. The AliExpress fine follows previous enforcement actions against other large platforms, including Temu, which resulted in a €200 million ($230 million) fine after a two-year investigation starting in 2024 over the sale and distribution of banned products, shortcomings in consumer protection, and potentially manipulative or addictive design features. This case signals that European regulators are prepared to use the DSA to reshape how e-commerce platforms operate.
Marketplace governance is becoming a competitive issue rather than simply a legal one. As consumers continue to discover and purchase beauty products through third-party platforms, trust, authenticity, and product safety are becoming increasingly central to the online shopping experience.
AliExpress has until October to propose additional remedial measures or risk further enforcement action, meaning the Commission’s decision is unlikely to be the final chapter in Europe’s push to strengthen oversight of online retailers.