Alibaba Group Holding Limited's (NYSE: BABA) online retail platform, AliExpress, is under scrutiny by the European Commission because it has not taken sufficient actions to halt the spread of illegal products and content.
The investigation aims to assess potential breaches of the Digital Services Act (DSA), focusing on aspects such as risk management, content moderation, advertising transparency, and access to data for researchers.
Initiated in response to queries from November about consumer protection measures, this probe seeks to compile more evidence through interviews, inspections, and information requests, the Wall Street Journal reports.
Margrethe Vestager, the European Commission's Executive Vice President, specifically mentioned the sale of products posing risks to consumers' health, including counterfeit medications and food items, particularly harmful to minors.
AliExpress, recognizing its responsibility, has indicated its ongoing collaboration with authorities to meet regulatory standards, emphasizing its commitment to maintaining a secure and lawful user marketplace.
This inquiry follows AliExpress's classification as a "huge online platform" under the EU's Digital Services Act, having reported over 104.3 million monthly active users in the region.
In 2023, Beijing's High People's Court penalized Alibaba 1 billion yuan for monopolistic practices. Chinese regulators had slapped a $2.75 billion penalty in 2021 in an antitrust probe.
Meanwhile, the U.S. Big Tech companies are also facing probes from the EU on antitrust grounds.
Meta Platforms Inc (NASDAQ: META) has contested the fees charged under the EU DSA.
Investors can gain exposure to Alibaba via Matthews International Funds, Matthews Pacific Tiger Active ETF (NYSE: ASIA), and FlexShares Emerging Markets Quality Low Volatility Index Fund (NYSE: OLVE).
Price Action: BABA shares are trading higher by 0.11% at $73.48 premarket on the last check Friday.