Meta has been fined €798m (£664m) for breaking competition law by embedding Facebook Marketplace within its social network.
The European Commission said this meant alternative classified ads services had faced “unfair trading conditions”, making it harder for them to compete.
In addition to the fine, it has ordered Meta to stop imposing these conditions on other services.
Meta said it rejected the Commission’s findings and would appeal.
EU antitrust head Margrethe Vestager said Facebook had impeded other online classified ads service providers.
“It did so to benefit its own service Facebook Marketplace, thereby giving it advantages that other online classified ads service providers could not match,” she added,
She said Meta “must stop this behaviour”, with the EU asking the firm to “refrain from repeating” the infringement.
Meta said the Commission had provided “no evidence” of harm either to competitors or consumers.
“This decision ignores the market realities, and will only serve to protect incumbent marketplaces from competition.”
The ruling is the result of an investigation which the Commission opened in 2021, after Meta’s rivals complained that Facebook Marketplace gave it an unfair advantage.
Meta has not previously faced a fine from the EU over competition rules – though it was told to pay €110m in 2017 for not handing over correct information when it purchased WhatsApp.
The Irish Data Protection Commissioner has also previously fined Meta more than €1bn over mishandling people’s data when transferring it between Europe and the United States.
And it also had to pay a comparatively tiny £50m in 2021, when the UK’s Competition and Markets Authority (CMA) accused it of deliberately breaking rules over its attempt to acquire Gif-maker Giphy – and ultimately demanded it sell the company altogether.
The decision comes as regulators are taking a firmer stance with big tech companies worldwide, with the US government considering a breakup of Google.