Euro MPs have "strongly" criticised telecoms firm Nokia Siemens Networks for providing "surveillance technology" to the Iranian authorities.
In a resolution adopted on Wednesday, the MEPs said the hardware was instrumental in the "persecution and arrests of Iranian dissidents".
But Nokia Siemens said that the implication that it had provided censorship technology was "wrong"
It has previously said that it had installed "lawful" technology in 2008.
"We will be clarifying any inaccuracy in their understanding of our business in Iran with the European Parliament," Ben Roome of the firm told BBC News.
Nokia Siemens said the technology that it had installed was similar to that used "in all EU member states and the US".
Mr Roome stressed that the technology is not used to monitor, filter or censor the internet.
"When you set up a modern network - as an operator - if you want a licence to operate you have to have a standard surveillance capability in the network," Christina Dinne, also of the firm, said.
Nokia Siemens told BBC News that it had provided "very basic surveillance" capabilities to Iran Telecom in 2008. The product is called Monitoring Centre and can be used to monitor local telephone calls.
"You can't track keywords," said Mrs Dinne.
Details of Nokia Siemens activities in Iran first came to light in June 2009 when media reports accused the firm of helping the Iranian government intercept communications.
Technology - such as mobile phones - were widely used in protests following Iran's disputed election.
"We are, of course, aware of reports from Iran, and condemn any abuse of communication technologies that may have taken place," said Mr Roome.
"We strongly believe that mobile networks enhance individuals' lives, promote transparency, and empower citizens with effective means of feedback.
"In Iran they have clearly played a pivotal role in their ability to communicate, organise, and share their story with the outside world.
However, the MEPS called on the EU to ban similar exports to "governments and countries such as Iran".
The statements were part of a wider resolution that included a call for Iran to "restore the transparency of its nuclear programme".
Iran has said that it has begun a new phase of uranium enrichment at its Natanz plant.
The Iranian president Mahmoud Ahmadinejad announced the country has produced its first batch of uranium enriched to 20% at a rally marking Iran's revolution.
The anniversary is the most important day in Iran's political calendar.
The opposition Green Movement is also trying to stage counter-demonstrations.
In the past these have been coordinated via social networking sites such as Twitter and Facebook as well as through e-mail and mobile phones.
Reports suggest that the internet has been throttled with services such as Google's Gmail service markedly reduced.