The European Commission on Monday said it has warned Facebook parent company Meta that it is breaching EU antitrust laws by distorting competition in markets for online classified advertising and abusing its dominant position.

The Commission said in a preliminary view that it would further investigate and that it could impose a fine of up to 10% of the company's annual global turnover, if there is sufficient evidence of an infringement of European Union rules.

"The claims made by the European Commission are without foundation," Meta spokesperson Tim Lamb said in a statement.

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"We will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive," Lamb added.

Sources familiar with the matter last month told Reuters the EU antitrust regulators were drawing up charges against Meta over its use of customer data and the tying of its classified advertisements service to its social network.

The Commission said on Monday that it was concerned that Meta is imposing "unfair trading conditions" on competitors of its own classified ads service, Facebook Marketplace, that want to advertise on its social networks Facebook or Instagram.

The EU competition enforcer launched an investigation into Facebook in June last year, focusing on whether the social network unfairly uses advertisers' data to compete with them in the online classified ads sector.