The EU has begun legal proceedings against the UK after it refused to ditch plans to override sections of its Brexit divorce deal.
An EU deadline for the government to remove sections of the Internal Market Bill expired on Wednesday.
The "letter of formal notice" could eventually lead to a court case against the UK at the European Court of Justice, the EU's top court.
But the EU has not walked away from talks over a post-Brexit trade deal.
European Commission President Ursula von der Leyen said the UK would have until the end of November to respond to the EU's concerns over the draft legislation.
UK-EU trade talks are continuing in Brussels this week. Prime Minister Boris Johnson has said both sides should "move on" if a deal was not reached by mid-October.
In a brief statement, Mrs von der Leyen said the bill was a "full contradiction" of previous UK commitments over how a hard border on the island of Ireland should be avoided.
She added that the bill was by its "very nature a breach of the obligation of good faith" contained in the withdrawal agreement that took the UK out of the EU in January.
A spokesperson for the UK government said the bill was a necessary "safety net" to protect trade between different parts of the UK.
They added the government would respond the EU's letter "in due course".
Dutch Prime Minister Mark Rutte appeared to play down the importance of the Commission's letter, calling the move "more administrative than political".