New Delhi, July 20 -- BRUSSELS - The European Commission fined AliExpress €550 million ($628 million) on Monday for systematically failing to remove illegal, unsafe, and counterfeit merchandise from its marketplace, marking the largest single penalty issued under the European Union's Digital Services Act since the regulation took effect in 2023.

The ruling closes a formal investigation opened in March 2024 and targets Alibaba Group's European marketplace arm, which Commission investigators found had overstated the reach of its automated detection systems while keeping human review teams too thin to catch what algorithms missed. Testing commissioned by Brussels found prohibited goods continuing to circulate through platform recommen...