Compliance in spotlight after EC fine

The European Commission's record fine against AliExpress highlights the rising need for compliance for Chinese cross-border e-commerce companies, prompting industry experts to call for stronger product certification, brand protection and localized operations in Europe.

Their comments came as Alibaba-owned cross-border e-commerce platform AliExpress said on Monday that it disagreed with the EC's decision to impose a record 550 million euros ($628.1 million) fine after the regulator accused it of failing to adequately address the sale of illegal, unsafe and counterfeit products.

"We disagree with the decision and the disproportionate fine," Ali-Express said, adding that the penalty did not fully reflect its established compliance framework or the significant improvements it had proactively introduced.

The company said it was carefully reviewing the decision and considering all available options.

The move is in response to the EC's earlier financial penalty, saying that AliExpress had breached its obligations under the Digital Services Act, or DSA, by failing to properly assess the risks linked to illegal, unsafe and counterfeit products on its platform and take effective measures to reduce their spread.

Against this backdrop, Jiang Han, a senior researcher at market consultancy Pangoal, said Chinese merchants selling overseas should immediately rebuild their product compliance systems and treat compliance as a minimum requirement for remaining in the market.

Specifically, merchants should review key qualifications, including CE certification and energy-efficiency labels, ensure testing reports are issued by certified institutions and maintain complete, traceable brand-authorization records to prevent infringement risks, Jiang said.

"Under intense regulatory pressure, compliance is no longer an advantage; it is the only ticket to the European market," he said.

The analyst added that sellers should also accelerate localization and brand building while reshaping their cost and profit models as responsive moves.

"Over the longer term, sellers must move away from price-based competition, raise product value and brand premiums to absorb compliance costs, and shift from merely entering overseas markets to establishing a lasting local presence," Jiang said.

The penalty is the largest imposed since the DSA took full effect and marks the EC's third known fine under the law. The regulator previously fined social media platform X 120 million euros and Chinese cross-border e-commerce platform Temu 200 million euros.

In an exclusive statement to China Daily, the China Chamber of Commerce to the EU said it took note of the European Commission's decision concerning AliExpress under the Digital Services Act.

"We respect the EU's right to regulate its digital market, but we are concerned that enforcement measures should be conducted in a fair, transparent, and proportionate manner, with full consideration given to companies' compliance efforts and legitimate rights."

"CCCEU hopes the European Commission will ensure that DSA enforcement provides legal certainty and a predictable business environment for all market participants, including Chinese companies operating in Europe."

Jian Junbo, deputy director of the Center for China-Europe Relations at Fudan University's Institute of International Studies, said the case highlights the European Union's increasingly stringent approach to digital regulation.

The bloc has made the DSA an important regulatory tool for major digital platforms, Jian said, adding that the fine represents not only a financial penalty, but also a signal that compliance costs in the European market are likely to continue rising. At the same time, Jian questioned whether such intensive regulation ultimately benefits innovation. While strict enforcement may improve oversight, he said it could also increase compliance burdens for both foreign and European technology companies, potentially affecting their long-term growth and capacity to innovate.

AliExpress has been ordered to submit a corrective action plan by Oct 20. The EC will assess the proposed measures after receiving the plan, while continued non-compliance could expose the platform to further penalties.