Announcing the record fine, the EU’s competition commissioner Margrethe Vestager said Google was in breach of competition law barring companies from exploiting their market dominance.
“Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google’s parent company,” the EU said.
Google plans to appeal against the decision.
“Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation, and lower prices are classic hallmarks of robust competition,” said a spokesperson for the company.
Google Search is pre-installed as the default web search service on most Android devices sold in Europe, closing off ways for rival search engines to access the market according to the EU ruling.
This happened because Google gave companies financial incentives to pre-install its apps which also prohibited them from making alternative devices using competing operating systems.
The fine is the largest penalty ever imposed by the European Commission and comes as the web giant is already fighting a previous record fine of €2.4bn (£2.2bn) for using Search to give its own online shopping service an illegal advantage.
The EU’s competition office, which has earned a reputation under Ms Vestager for tackling American technology giants, also has an ongoing investigation into Google’s advertising business AdSense.
Ms Vestager has denied any suggestions of anti-US bias, saying she very much likes America.
“But the fact is that this has nothing to do with how I feel. Nothing whatsoever,” she said.
“Just as enforcing competition law, we do it in the world, but we do not do it in political context.”
Google’s web search, advertising, and mobile operating system products have an enormous hold of market share individually, which has drawn the company a lot of criticism.
However, the company has been accused of falling foul of antitrust laws by using this dominance to squeeze out competitors.
Android is the most widely used mobile OS in the world, installed on roughly 76% of all smartphones, including those manufactured by Samsung, Sony and Huawei.
Google Search is also the most widely used search engine in the world, performing roughly 95% of all searches despite the efforts of competing services such as Bing and DuckDuckGo.
Calls to extend the ruling from the EU to the US competition regulators have followed the announcement of the fine.
John Simpson, the director of Consumer Watchdog, said: “The US Federal Trade Commission or Department of Justice should also act to end Google’s monopolistic abuses, instead of letting the Europeans be the only cop on the antitrust beat.”
Business review site Yelp has complained about Google’s anti-competitive business models, and its polic head, Luther Lowe, described Ms Vestager’s decision as an “important step in restoring competition, innovation and consumer welfare in the digital economy”.
“The EU must ensure complete compliance from a recalcitrant Google and the US must take action to provide American consumers with similar protections,” added Mr Lowe.