It is perhaps just human nature to assume that the attitude towards ethical (and unethical) business is uniform from culture to culture around the world, with one's own culture being definitive and thus the default as a standard. But just as far-away cultures can be very different than one's own, so too can far-off business practitioners and even regulators have different beliefs, values and thus expectations concerning how ethical business norms should be than do such people in one's own culture. The E.U./China trade interface provides a case in point.
In Wealth of Nations,
Adam Smith does not exclude a role for government in regulating markets and
addressing the externalities of market competition. The emphasis lies in maintaining
competitive markets and making up for any societal costs, such as unemployment
and even homelessness. What about “mopping up” unethical business practices to
protect consumers? Is there a role for government here or is “buyer beware” sufficient
because competition in a market will put unethical suppliers out of business? A
business strategy of stealth and denial can delay the accrual of negative
reputational capital, especially if the pool of potential and likely buyers is
not stagnant. The management of a coffee house or lunch place near a large
university, for instance, can get away with a lot of unsavory practices without
the annual incoming crowd having any knowledge of the sordid mentality of the
management or its rogue retail employees. Similarly, nonsupervisory, uneducated
employees working at a major retail company’s customer-service telephone room
can get away with lying even in telling aggrieved customers, “The managers here
don’t talk with customers” and even “We don’t have supervisors in this department.”
This assumes that an automated answering “menu” even has an option to speak
with a live person rather than with AI, which may not grasp the concept, complaint.
Nietzsche’s claim that the will to power is the primary motive even for weak people
who are like herd animals and so cannot master their own instinctual urge to
dominate applies in spades to retail phone-banks, even at least in appearances
to AI answering-machines. The unilateral, even rogue “power trips,” or power-aggrandizement,
whether by an actual, small employee or a human-programmed AI phone-system
(i.e., machine learning applied to a switch-board), give rise to emotional harm
and thus are unethical because such treatment is not justified, especially to
paying customers. Paying to be dominated is perhaps another line of business beyond
the reach of the present topic. In a competitive market, presumably companies
with rude, even hostile customer-service employees get enough of a negative
reputation that even repeat customers eventually go elsewhere, but what if rude
customer service is the norm in a given industry? A new potential supplier may
not be motivated financially to enter the market based on customer-service as
the primary basis of competitive advantage. Of course, the intentional (or,
looking the other way) sale of illegal, unsafe, and counterfeit products can
benefit from the deceit, especially on e-commerce platforms. Furthermore, if
unethical business practices are the norm in the host country of such a seller
but not where the customers are located, the reputation may be too light for sufficient
notice to be taken by potential (and repeat) customers for them to buy from
other sellers. This differential, and the typical erroneous assumption that the
business ethics in one’s own culture is universal around the world and therefore
one is not vulnerable to extremely unscrupulous sellers elsewhere, may be behind
the €550 million fine that the E.U. slapped on AliExpress, an online
marketplace based in China, on 20 July, 2026.
Even though I have no data to
suggest that business practitioners in China were generally less ethical than
their counterparts in the E.U., both the magnitude of the fine and the broadness
and substance of the Commission’s accusation that AliExpress managers had
failed “to adequately assess and mitigate risks linked to the sale of illegal,
unsafe and counterfeit products” may be indicative of a very unethical business
culture, not only in the company, but also in the general business culture in China.[1]
It may have been that at least as of
2026, even blatant unethical conduct was considered as a regular part of doing
business in China, as in the statement, everyone here sells counterfeit.
Two years prior, the E.U. Commission had “found that AliExpress failed to
establish an effective system to detect and remove illegal products, while
underestimating the gap between the number of human moderators available and the
scale of the workload.”[2]
Failure to establish a system that worked can be interpreted as an
active decision to allow, or tolerate, illegal products on the “selves.” So too
can the intentional understaffing of monitors in the company. The management
need not have admitted to the mentality, for it is possible that its fingerprints
were all over the choices actually taken by the managers. The “platform’s
product compliance checks were also found to be vulnerable to abuse, with
malicious traders allegedly misclassifying products to exploit less stringent
requirements.”[3] Establishing
an insufficient number of checks can itself be interpreted as being too
comfortable with product-negligence and even the existence of malicious sellers.
That “large volumes of illegal products—including unsafe toys and dangerous
cosmetics—continued to circulate on AliExpress despite moderation efforts, in
some cases remaining online for weeks after being flagged” may point to
a managerial acceptance of squalid sellers on the marketplace platform.[4]
In fact, the E.U. found “that AliExpress failed to properly enforce its penalty
policy, allowing stores selling illegal products to remain active on the
platform even after receiving sanctions” as if they would suddenly reverse an
unethical mentality and organizational culture.[5]
Sellers were even “able to bypass safeguards and list fake products” because
the company’s brand authorization system “was deemed ineffective and
insufficiently robust to stop abuse.”[6]
Even the company’s public statement that the company had invested a lot in risk
assessment and mitigation, product safety and consumer protection does not touch
on how those investments were used, or even whether they were in fact used
sufficiently. In fact, spending a lot of money can act as a smoke screen. The
failure to acknowledge lapses can itself be viewed as unethical, or at least as
not serious. In other words, mendacity can be like smoke indicative of a hidden
fire if unethical people are habitually so, especially in covering up their own
unethical decisions. Confessions are not necessary.
A company’s foreign direct-investment
renders a foreign country’s beliefs and values concerning business ethics (and
integrity in general) relevant. Even international trade—even at arm’s length—can
cause two different ethics cultures to clash. The people in the more ethical business
culture may be vulnerable to worse, and thus unforeseen or unanticipated,
unethical practices such as selling illegal or counterfeit products under false
pretenses (i.e., lying) rather than merely charging too much or having rude,
power-hungry, or product/policy-incompetent customer-service employees. To be sure, the latter two unethical practices
are worthy of disrepute, but then how much more severe, and thus indicative,
are the former two. As an admittedly rouge gauge, the difference between the
ethical norms in the E.U.’s business sector and those in China’s can be grasped.
Cultures around the world can be said to differ even substantially in terms of
tolerance for unethical volition, mentality, and conduct and thus societal
expectations for ethical conduct. A very large fine may be a quantifiable
indication that two cultures differ substantially.
To go beyond compensation, the
matter of whether as a penalty such a fine can actually change, or uplift, the
relatively sordid business culture by somehow incentivizing practitioners in it
to behave honorably rather than continuing with corner-cutting expediency seems
too idealistic, and thus unrealistic because humans tend to be habitual
creatures in conduct and mentalities are not likely to change, given their
sheer gravitas, especially if they are oriented to sneaking around a new barrier.
A river’s dam that has many holes is not likely to fix itself. Accordingly, the
Commission would be wise to set fines as compensation for all of the harm to European
consumers, rather than to teach the Chinese a lesson in order to mold Chinese business
after European business. To be sure, the temptation to penalize and manipulate
towards one’s own culture can be very strong, but being realistic can work
wonders in satiating the desire to mold others who are different in one’s own
image. Knowing the otherness of the other, for example, and publicizing this
domestically in the E.U., could potentially do a lot to facilitate the mechanism
of market competition in the weeding out of the squalid sellers in China by informed
European consumers. The Commission has a loud-speaker with which to more closely
link a company’s reputational capital to the actual business practices that may
even be hidden from view.
2. Ibid.
3. Ibid.
4. Ibid.
6. Ibid.
