The website has been given 30 days to make the payment.
The Italian antitrust authority has fined travel planning website TripAdvisor €500,000 for presenting misleading information in its reviews.
The complaint has been logged by a national hoteliers’ association and a consumer protection agency.
Italian authority claims that the travel website promoted its content to be "authentic and genuine" but failed to adopt measures to prevent false reviews.
The authorities also claimed that users reading reviews of hotels and restaurants, and other travel information at TripAdvisor Italy, had a hard time distinguishing between real and fake reviews.
CNN reported TripAdvisor as saying: "We think the ruling is unreasonable, strongly disagree with its findings and will file an appeal.
"We firmly believe that TripAdvisor is a force for good — both for consumers and the hospitality industry."
Authorities have demanded the payment within 30 days, and have criticised the company of failing to review and check fake postings before publishing them on to the site.
TripAdvisor added: "The bottom line is, if people didn’t find the reviews helpful, they wouldn’t keep coming back to our site."
Previously, a UK regulator asked TripAdvisor to stop claiming that the reviews were written by genuine travellers, reported The Guardian.