The Fair Trade Commission has launched formal proceedings to sanction Chinese e-commerce giant AliExpress for alleged violations of e-commerce laws.

According to industry sources on Monday, the FTC recently issued a review report outlining sanctions against AliExpress for failing to report its basic business information to the government.

Under the Act on the Consumer Protection in E-Commerce, operators of e-commerce platforms must report their business name, email address, internet domain name and server location to the local government upon starting business here, which the FTC insists that AliExpress failed to do.

In September 2023, AliExpress registered its Korean subsidiary, AliExpress Korea, with the Seoul city government, with its business location registered as Jung-gu in Seoul and its server location in Geumcheon-gu. The representative was documented as Hui Yat Sin Cindy, 45, a Chinese national residing in Hong Kong.

However, the FTC insists that AliExpress Korea is not the actual operator, as the primary operations and management of the platform are still handled by AliExpress' headquarters in Hong Kong.

The FTC is expected to convene to decide on imposing sanctions after receiving an official response from AliExpress.

"We respect the Korean government and industry, and will maintain communication with regulatory agencies and relevant government departments," an AliExpress official said Monday, adding that they are committed to strictly adhering to Korean regulations and laws.

The FTC is also looking into Temu and Shein, two other Chinese e-commerce platforms operating in Korea, under similar potential violations.

Meanwhile, the antitrust watchdog is closely investigating consumer privacy violations by e-commerce platforms.

Both AliExpress and Temu have provisions that allow sharing user data with third parties, raising fears about the potential overseas leakage of consumer information in Korea. Other issues involve allegations of deceptive online promotions.