The popular but controversial taxi app for mobile phones puts customers in touch with private drivers at prices lower than those of traditional taxis.
Judge Claudio Marangoni ruled UberPOP was subject to only minor fees compared to the costs taxis have to pay in order to operate and thus was benefitting from unfair competition.
Marangoni, according to press agency AGI, gave Uber 15 days to comply with his ruling. The UberPOP application for mobile devices will be shutdown in Italy even if the company appeals the decision.
Uber Europe's legal director, Zac De Kievit, later said the company would appeal the ruling as it did not want Italians to be deprived of a reliable and affordable means of travel.
Italian taxi drivers' groups filed a complaint in mid-April against UberPOP.
Uber has been hit with court injunctions in Belgium, France, the Netherlands and Spain, and has faced protests from taxi firms in numerous major European cities, including London and Brussels.
The company is facing a barrage of legal challenges spurred on by a furious taxi lobby, which says Uber drivers should be regulated the same way as normal cabs.
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