The European Parliament has rejected the anti-counterfeiting trade agreement, known as ACTA.
It is the first time MEPs used their powers under the Lisbon Treaty to reject an international agreement.
Some had argued ACTA was a necessary step, protecting intellectual property rights.
The European Commission pointed to a sharp increase in music and video piracy and fake goods.
It says that 103 million counterfeit products were seized at the EU's external borders last year.
Opponents said it did not go far enough in protecting individual freedom on the internet.
They feared service providers would be forced to monitor their customers’ usage and hand over that information.
ACTA had already been rejected by five European Parliament Committees.
Today it was defeated in the parliament by 478 votes to 39 with 165 abstentions.
