A record fine, and it is not the first
The European Commission has fined AliExpress €550 million, or roughly NZ$1.074 billion, for failing to police the sale of unsafe and counterfeit products. It is the largest penalty ever handed down under the EU’s Digital Services Act, and it lands as part of a clear pattern rather than a one-off. The Commission fined rival Temu €200 million (NZ$390 million) in May 2026 for similar breaches, and less than three weeks before the AliExpress ruling, parent company Alibaba agreed to pay US$600 million (NZ$1.027 billion) to the US government over allegations it sold illegal pharmaceuticals and pill-making equipment into the US.
What the Commission found is damning. AliExpress moderators had only 10 to 20 seconds to review each flagged illegal product, a direct result of the platform never assessing whether it had the staff to match the volume. Flagged products stayed online for weeks, and its own recommender and advertising systems were amplifying the spread of illegal goods. AliExpress has until 20 October to submit an action plan or face further penalties.
The fairness argument the EU made out loud
What makes this a business story rather than a consumer-safety footnote is how bluntly the Commission framed it. European Commission Executive Vice-President Henna Virkkunen said the spread of counterfeit clothing, unsafe toys and dangerous cosmetics is “not an unavoidable cost of shopping online – it is a failure by AliExpress to comply with its obligations”. She then said the quiet part: the failure is “also unfair for those companies that are complying with all our rules”.
That is the whole story for anyone running a shop in New Zealand. Local retailers have always carried the cost of product safety testing, liability for what they sell, and regulatory compliance as the price of doing business. Platforms like AliExpress and Temu built their model on skipping that, offloading the risk onto consumers and the enforcement bill onto taxpayers. AliExpress, for its part, disagrees with what it calls a “disproportionate fine”.
Why platforms are the only lever that works
The scale of the problem explains why regulators are targeting platforms rather than parcels. The EUIPO valued global counterfeit trade at around US$467 billion in 2021, about 2.3% of all imports, with EU counterfeit imports alone estimated at US$117 billion. Crucially, shipments of fewer than 10 items accounted for 79% of all seizures in 2020-21, up from 61% two years earlier. The direct-to-consumer parcel is now the main distribution channel for fakes, which is exactly why chasing individual parcels is hopeless and forcing the platform to clean house is the only thing that scales.
New Zealand’s exposure is real
These are not fringe players here. NZ Post research found 35% of New Zealand shoppers said their most recent online purchase was from Temu, and about one in four New Zealanders have shopped on the platform. The safety concerns travel with them. When consumer organisations in Germany, France, Denmark and Belgium tested 162 products from Temu and Shein, roughly 60% failed, with toys among the worst.
Consumer NZ’s head of research and advocacy Gemma Rasmussen put the regulatory gap plainly, warning that safety laws built around traditional retail are being tested by a marketplace where a product “can be bought from overseas in seconds, shipped directly to a household, and reach a child’s bedroom before any domestic safety authority has visibility of it”.
Wellington is fixing the wrong problem
New Zealand has moved, but only at the edges. From March 2026, Customs introduced a NZ$2.21-per-parcel levy on air arrivals, ending a system Newsroom described as a taxpayer subsidy for cheap imports. That fixes the fiscal freebie. It does nothing about safety or intellectual property. There is no NZ equivalent of the DSA, no platform liability framework, and no enforcement muscle behind it.
Retail NZ chief executive Carolyn Young has argued for an EU-style tariff approach, noting local retailers generate more than 90% of their sales domestically and would benefit from tighter border protection. But the EU model is a double-edged sword. Its new €3-per-item charge can apply per line item rather than per parcel, and Starshipit chief operating officer Abi Bennett warns NZ exporters selling into Europe are “caught in the crossfire” as compliance costs compound.
With NZ retail sales up just NZ$232 million, or 0.9%, in the March 2026 quarter, the structural drag from platforms that never carried equivalent costs keeps biting. The EU fine is the clearest signal yet that the competitive distortion is being corrected. The open question for local operators is how long New Zealand stays the regulatory gap in a global framework that is closing everywhere else.
Sources
- EU hits AliExpress with a record fine over unsafe and counterfeit goods (2026-07-20)
- EU hits China’s Alibaba with €550M record fine over illegal products (2026-07-20)
- AliExpress handed €550m fine over DSA breaches (2026-07-20)
- Consumer NZ urges parents to avoid cheap Temu toys after UK recall (2026-07-20)
- EU-style tariff ‘could be advantageous’ in New Zealand (2026-07-07)
- Too much, Temu: New Customs levy ends taxpayer subsidy for cheap parcels (2026-03-06)
- Mapping Global Trade in Fakes 2025: Global Trends and Enforcement Challenges (2025)
- Retail and wholesale trade | Stats NZ (2026-03)