Meta was fined €798m (£664m) for breaching competition law by integrating Facebook Marketplace into its social network.
The European Commission said this meant alternative classifieds services faced “unfair trading conditions”, making it harder for them to compete.
In addition to the fine, it ordered Meta to stop imposing these conditions on other services.
Meta said she rejects the Commission's findings and will appeal.
EU antitrust chief Margrethe Vestager said Facebook had hampered other online classifieds service providers.
“It did this for the benefit of its own Facebook Marketplace service, giving it benefits that other online classifieds service providers could not match,” she added:
She said Meta “must stop this behavior”, with the EU asking the company to “refrain from repeating” the infringement.
Meta said the Commission had provided “no evidence” of harm to competitors or consumers.
“This decision ignores market realities and will only serve to protect historic markets from competition.”
The decision is the result of an investigation opened by the Commission in 2021, after Meta's competitors complained that Facebook Marketplace had given it an unfair advantage.
Meta has never been fined by the EU due to competition rules, although it had to pay 110 million euros in 2017 for failing to provide correct information during the purchase of whatsapp.
The Irish Data Protection Commissioner has also already fined Meta more than €1 billion for mishandling personal data during its transfer between Europe and the United States.
And he also had to pay a relatively small £50 million in 2021, when the UK's Competition and Markets Authority (CMA) accused him of deliberately breaking the rules in his attempt to acquisition of Gif maker Giphy – and ultimately asked him to sell the company completely.
The move comes as regulators take a tougher stance towards big tech companies around the world, with the US government considering a Google breakup.
