The world-renowned tech firm has been accused of using its Onavo virtual private network app to gather information on its industry rivals, with MPs accusing Facebook of having "intentionally and knowingly violated both data privacy and anti-competition laws".
In the report, the MPs said Facebook could "collect app usage data from its customers to assess not only how many people had downloaded apps, but how often they used them".
The report added: "This knowledge helped them to decide which companies were performing well and therefore gave them invaluable data on possible competitors. They could then acquire those companies, or shut down those they judged to be a threat."
Recently, Facebook denied spying through a scheme that gathered highly personal data from paid volunteers.
Research by TechCrunch found that the volunteers for the scheme had been paid up to $20 a month in return for opening up their phones to analysis.
However, Facebook rubbished the accusation of spying, saying it was an unfair and inaccurate characterisation of the situation.
A spokesperson for the company explained: "Key facts about this market research program are being ignored.
"Despite early reports, there was nothing 'secret' about this; it was literally called the Facebook Research App. It wasn't 'spying' as all of the people who signed up to participate went through a clear on-boarding process asking for their permission and were paid to participate.
"Finally, less than five percent of the people who chose to participate in this market research program were teens. All of them with signed parental consent forms."