The European Commission has fined Spain's Telefonica 151.9m euros ($207m; £102.5m) for stifling competition in the broadband internet market.
Ms Kroes criticised Telefonica for breaching EU rules
It said telecom firm's wholesale prices for other internet providers were too high compared to its own retail tariff.
"The margin squeeze that Telefonica imposed on its competitors not only raised their costs, but also harmed customers," the Commission said.
The firm said would appeal against the decision immediately.
The company added that the Commission's ruling was "unjustified and out of proportion", saying it had stuck closely to guidelines set out by Spanish regulators.
However, European Union Competition Commissioner Neelie Kroes said the high fine reflected the fact that the Spanish firm was aware it was breaching EU rules.
The penalty is the second highest in EU history, second only to a 497m euro penalty imposed on Microsoft.