Indian regulators have effectively blocked Free Basics, a controversial Facebook online service that sought to bring free access to a limited version of the social network and other sites to the country's poorest people.
The Telecom Regulatory Authority of India on Monday outlawed charging different prices for downloading different kinds of internet content.
The ruling, which regulators said was guided by the principles of net neutrality, is a major setback for Mark Zuckerberg, the Facebook chief executive, who had lobbied hard for the programme as part of a campaign to expand Internet access to billions of people around the world.
Yet, it is a victory for critics who argued that Facebook's Free Basics programme gave an unfair advantage to some internet services over others.
EXPLAINER: India's relationship with Facebook and Free Basics
The ruling essentially bans programmes such as Free Basics that are based on what is known as "zero rating" in industry jargon, because they do not charge for downloading certain kinds of data. In a policy memo, Indian regulators warned that such programmes raise the risk that users' "knowledge and outlook ... would be shaped only by the information made available by those select offerings".
Critics of Free Basics have argued that the free service effectively steers users towards Facebook and its partners, while making it harder for other internet services, including homegrown startups, to build their own audiences.
They also say that the project will only make Facebook's founder Zuckerberg and his partners richer, while activists have described the service as "a poor internet for poor people".
Free Basics is a key pillar of Facebook's ambitious Internet.org programme, which looks to deliver internet access to billions of people globally.
The app, offered through Facebook's mobile operator partner Reliance Communications since last year, provides free access to a stripped-down version of Facebook and certain other websites - including some that provide information such as weather forecasts, health education and job listings.
While Zuckerburg has acknowledged that his business would benefit from gaining more users around the world, he has also argued that internet access is a powerful tool for economic development in low-income regions.
READ MORE: India 'leads world' in Facebook content censoring
On Monday, Zuckerberg posted on Facebook that he would continue to campaign for Free Basics.
"While we're disappointed with today's decision, I want to personally communicate that we are committed to keep working to break down barriers to connectivity in India and around the world," Zuckerberg said.
"We know that connecting them can help lift people out of poverty, create millions of jobs and spread education opportunities. We care about these people, and that's why we're so committed to connecting them."
Only 252 million of India's 1.2 billion people have access to the internet. Facebook has about 130 million users in India and sees a huge opportunity to expand by reaching those without internet access.