Ofcom has fined a pornography provider £1m for not having robust age checks.
AVS, which runs 18 adult websites, was also fined £50,000 for not responding to information requests from the communications regulator.
Since July, websites and apps that host adult content have had to have age verification checks in place to stop young people from seeing their content.
Days after those rules came into force, Ofcom began investigating websites that hadn't properly complied, including AVS sites, which have millions of monthly UK users, according to the regulator.
AVS has 72 hours to introduce "highly effective" age verification or it will be fined £1,000 a day until it does.
"They said that they had age checks in place, but they just weren't good enough," said Oliver Griffiths, Ofcom's online safety group director to Sky News' Sophy Ridge and Wilf Frost on Thursday morning.
"They didn't have liveness checks, so you could hold up a photograph of somebody else and that would get you through. But that's obviously just not good enough."
This is the third company Ofcom has fined since the new rules came into place. The forum 4chan was the first; it was fined £20,000 in October.
The fines came as Ofcom released new data about the impact of their new online safety rules.
Almost half - 47% - of children aged eight to 17 encountered an age check online when trying to access age-restricted content after the July deadline compared to 30% before, according to the new report.
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More than half - 58% - of parents believe the measures are already improving the safety of UK children online, while 36% noticed a potential impact on their child's online activity, according to the regulator's statistics.
The new rules proved controversial, however.
Some say the age verification checks are too easy to bypass, while others argue they are a security risk, as users usually have to upload a picture of their face to a third-party website.
The technology secretary Liz Kendall said Ofcom has the government's "full backing" to use all of its powers in enforcing the rules.
"Since the enforcement of the Online Safety Act, platforms have finally started taking responsibility for protecting children and removing illegal and hateful content," she said.
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