The Spanish government has fined property rentals giant Airbnb €64m (£56m) for advertising unlicensed apartments.
It also said that some of the properties advertised in the popular tourist destination were banned from being rented.
The fine, which cannot be appealed against, means Airbnb has to withdraw the adverts promoting unlicensed properties. The BBC has contacted Airbnb for comment.
Spain, one of the top most visited countries in the world, has a buoyant tourism economy but that has fuelled concerns about unaffordable housing, as high demand from visitors raises the price of housing, pushing local people out of the market.
“There are thousands of families who are living on the edge due to housing, while a few get rich with business models that expel people from their homes,” said Spain’s consumer rights minister Pablo Bustinduy in a statement.
Like many countries, Spain’s government is also concerned about how short-term holiday lets can change a neighbourhood, fuelled by a transient population of holiday-goers.
The country has been fighting a battle with thousands of Airbnb listings, banning them and clamping down on how many properties the firm can advertise. In May, there were demonstrations against the firm ahead of the busy summer season.
Spain’s government said 65,122 adverts on Airbnb breached consumer rules, including promotion of properties that were not licensed to be rented, and properties whose licence number did not match with those on official registers.
Writing on social network Bluesky, Mr Bustinduy said: “We’ll prove it as many times as necessary: no company, no matter how big or powerful, is above the law. Even less so when it comes to housing.”
Globally, several popular tourist cities place heavy restriction on Airbnb, including Barcelona, New York, Berlin, Paris and even San Francisco, where Airbnb was founded.
The tech firm started up in 2007 but became hugely popular around 2014, as tourists looked for cheap accommodation without the tax costs imposed on hotels.
Users swelled as anybody could become a “host” and make some extra cash from renting out their spare room – though many major cities have since placed limits on these types of rentals, as complaints of noisy house parties and absent hosts became an issue.
By BBC News
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