The European Union imposed a fine of €550 million ($629 million) on the e-commerce service of Alibaba Group Holding Ltd for selling illegal products, the largest penalty under the bloc's content moderation rules.

The European Commission, the EU's executive arm, said in a statement on Monday that AliExpress failed to properly assess unsafe or counterfeit products listed on its platform and did not take action to enforce its sanctions policy against repeat-offending sellers.

The Commission has been investigating the Chinese company over a list of violations under the Digital Services Act (DSA) since 2024 and escalated the probes last year.

Europe has become stricter in enforcing the DSA since it fully came into effect in 2024, targeting social media companies and online marketplaces with investigations and penalties.

The first two fines under the law were €120 million imposed on Elon Musk's X platform in December and €200 million on Chinese e-commerce giant Temu in May.